Automating your Award Interpretation

April 7, 2025
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5 min read

When it comes to workplace awards, we’re not talking about ‘Employee of the Month’ or ‘World’s Coolest Boss.’ In this blog, we’re diving into the less celebrated—but critically important—workplace awards that dictate how employees are paid.

Far from being a cause for celebration, workplace awards can be a source of stress for employers. With countless variables to consider, manually interpreting awards is often a time-consuming, repetitive, and tedious task. That’s why many businesses are now switching to automated award interpretation software to simplify the process.

Automation reduces room for human error, cuts out repetitive data entry, and frees up time for employers to focus on higher-value tasks—like nabbing that coveted ‘World’s Coolest Boss’ title.

What is an Award?

A modern award is a document that sets out the minimum terms and conditions of employment on top of the National Employment Standards (NES). Modern awards came into effect on 1 January 2010. There are currently 122 industry or occupation awards covering most people who work in Australia.

Awards outline entitlements such as:

  • Pay rates
  • Hours of work
  • Rosters
  • Breaks
  • Allowances
  • Penalty rates
  • Overtime rules

Within most awards, pay rates vary based on factors like age groups, work hours, or public holidays. Employers must ensure they correctly apply these entitlements to their employees—a task that can quickly become complicated without proper systems in place.

What is Award Interpretation?

In payroll terms, award interpretation refers to calculating the correct rate of pay for hours worked during a specific period of time.

For example:
James works as a waiter in a Melbourne restaurant. His pay varies depending on his roster—weekday vs weekend shifts, overtime hours, after-hours work, or public holidays all impact his rate of pay. Other factors include penalty rates and his age at the time of working.

All these variables are specified in the industry award James is employed under. His employer must interpret these award rules accurately to calculate his pay—a process that can be done manually or automated through payroll software.

How does Award Interpretation work

To automate award interpretation:

  1. Award rules are entered into payroll software at the start of an employee’s employment.
  2. Each payroll run automatically calculates the correct rate based on those pre-set rules.

For example:
An employee who is 20 years old is entitled to $20.50 per hour as their base rate. When the employee turns 21, their base pay rate increases to $21.50. With automated award interpretation software like Microkeeper, this change happens automatically—no manual updates required!

Without automation, employers would need to manually calculate pay rates each week by cross-referencing timesheets with public holiday calendars, employee birthdays, and updated award conditions—a process prone to errors and inefficiencies.

Key features of Automated Award Interpretation software

Rate Rules

Automated systems handle changes like age-based pay increases effortlessly. For example:

  • When an employee celebrates a birthday that qualifies them for a higher rate, the system automatically adjusts their base pay—ensuring compliance without manual intervention.

Shift Rules

Shift rules automate calculations for overtime and other award conditions. For instance:

  • If an employee earns overtime after 5 PM, the system applies shift rules to calculate their pay accordingly based on timesheet data.

Real-Time Adjustments

Automated systems ensure accurate pay calculations even when rosters change unexpectedly or public holidays occur mid-pay cycle.

Recent Updates on Workplace Awards (2025)

In recent years, there have been updates to modern awards aimed at improving clarity and fairness for both employers and employees:

  1. Annual Wage Reviews: The Fair Work Commission continues its annual review process to adjust minimum wages in line with inflation and economic conditions. In 2024-2025, wage increases averaged 5.75%, impacting many industry awards directly.
  2. STP Phase 2 Compliance: Businesses must now report detailed payroll information (e.g., income types like allowances or overtime) under Single Touch Payroll Phase 2 requirements.
  3. Award Flexibility Requests: More businesses are seeking flexibility agreements within awards to address unique rostering challenges post-pandemic.

Employers should stay updated on these changes to ensure compliance and avoid penalties.

Benefits of Automated Award Interpretation

Switching to automated award interpretation offers significant advantages:

  • Simplifies complex award calculations.
  • Saves time by eliminating manual effort for managers and payroll staff.
  • Reduces human error in payroll processing.
  • Improves accuracy and compliance with Fair Work regulations.
  • Provides real-time roster costing for better budgeting decisions.
  • Reduces administrative costs over time.

These benefits extend beyond payroll accuracy—automation frees up resources for higher-value tasks like improving employee engagement or optimizing workforce planning.

Award Interpretation with Microkeeper

Microkeeper simplifies award interpretation by integrating timesheets with payroll processing using automated rules tailored to Australian workplace conditions. Key features include:

Rate Rules:

Automatically adjust pay rates based on factors like employee age or job type without manual intervention.

Shift Rules:

Automate overtime calculations based on pre-set conditions (e.g., after-hours work or public holidays).

Shift rule example

Real-Time Payroll Integration:

Microkeeper captures all necessary employee details upfront during setup—ensuring smooth payroll runs every time.

Why Automate Award Interpretation?

Investing in automation saves time upfront while delivering long-term benefits like improved compliance, reduced costs, and enhanced productivity. By automating repetitive tasks such as award interpretation, businesses can focus on strategic growth initiatives instead of administrative headaches.

Useful links

The Fair Work Ombudsman's P.A.C.T (Pay and Conditions Tool)

Great resource including a pay calculator plus information on different awards and updates on award amendments.

https://calculate.fairwork.gov.au/

The Fair Work Commission

Useful information plus a handy resource of awards.

https://www.fwc.gov.au/awards-and-agreements

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