Two shifts of the same length can cost very different amounts, and the difference is in words most people running a roster have never had explained. Here is what each one means — and, importantly, where to get the number that applies to you rather than a number off a blog.
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Every figure that matters — the exact penalty percentage, the loading, the thresholds — comes from the modern award or agreement that covers your staff, and it differs between awards and changes over time. Hospitality, retail and fast food are three different awards with three different answers.
So this page explains what each term MEANS, so that you can read your own award and know what you are looking at. For the numbers, use the Fair Work Ombudsman's Pay and Conditions Tool, which asks which award applies and gives the current rates. Anyone quoting you a flat percentage without asking which award you are under is guessing.
A penalty rate is a higher hourly rate for hours worked at a time the award treats as unsociable — typically evenings, weekends and public holidays. It is expressed as a percentage of the ordinary rate.
The practical consequence for a roster is that hours are not interchangeable. Moving a four-hour shift from Thursday to Sunday can change what that shift costs substantially, without changing anything a customer would notice. This is the single biggest lever most rosters have and the one least often looked at.
Casual loading is an additional percentage paid to casual employees in place of the entitlements permanent staff get — paid annual leave, paid personal leave, and notice of termination.
It is not a bonus and it is not optional. It is compensation for the things a casual does not receive, which is why a casual's hourly rate looks higher than a part-timer's for the same work. When you compare the cost of a casual to a part-timer, compare the total cost of employing each over a year, not the two hourly rates.
A split shift is one working day broken into two or more separate periods with an unpaid gap — the classic being a lunch service, four hours off, then dinner.
They are attractive on paper because you pay only for the hours you need. They cost you in ways that do not appear on the roster: an employee whose day runs from 11am to 10pm for seven paid hours is unlikely to stay long, and in many awards a split shift carries its own allowance or restrictions on how many breaks are allowed. Check yours before building a week around them.
An RDO — rostered day off — is a paid day off that an employee accrues by working slightly longer than their ordinary hours across a cycle. It is not simply a day they are not rostered.
The distinction matters when someone leaves or when a public holiday lands on one. Accrued RDOs are usually an entitlement to be paid out or taken, so tracking which days on your roster are genuinely RDOs rather than ordinary days off is a payroll question, not a scheduling preference.
Most awards set a minimum number of hours an employee must be paid for once they are called in, regardless of how long you actually need them. Rostering a two-hour shift where the minimum is three or four does not save you an hour — it just means you pay for hours nobody worked.
This is the rule that quietly punishes a roster built by guessing at cover. If you know your minimum engagement, it is usually cheaper to roster one person for a proper shift than two people for short ones.
None of this argues for rostering fewer people. It argues for knowing what the week costs while you are building it, rather than finding out when payroll runs.
Smart Roster shows what the week costs as you build it, so a Sunday you were about to roster four people on is a number you see before you publish, not after.