This feature ensures pay rate calculations follow the Fair Work Commission’s rounding requirements, reducing the need for multiple pay items for different rate variations. It also simplifies award policy maintenance during annual wage reviews, supports accurate rate calculations for Modern Award templates, and maintains full compatibility with existing pay policies.
Getting Started
Prerequisites
Before you can use Fair Work Rounding, the award policy must be appropriately configured.
For System Administrators:
Access to the Award Policy configuration.
Understanding of Modern Award requirements for your organisation and require Fair Work rounding
For Payroll Officers:
There are no additional permissions required.
Fair Work Rounding is applied automatically when configured in the award policy.
Note: Fair Work Rounding is an optional feature that must be explicitly enabled in your award policy configuration. Existing calculations continue to work unchanged unless the feature is enabled.
Understanding Fair Work Rounding
The Problem with Traditional Rounding
When calculating pay rates with multiple multipliers (such as casual loading plus penalty rates), the traditional method multiplies all factors together before rounding. This can result in rates that differ from Fair Work Commission published rates.
Example: Time and a Half on a Casual Rate:
Method | Calculation | Result |
Traditional (Combined) | 24.10 x (1.25 x 1.5) | 45.1875 |
Traditional (Rounded at end) | 24.10 x 1.875 = 45.1875 | 45.19 |
Fair Work (Sequential) | 24.10 x 1.25 = 30.125 -> 30.13 x 1.50 = 45.195 | 45.20 |
How Fair Work Rounding Works:
Fair Work Rounding applies each multiplier individually in sequence, rounding each intermediate result to 2 decimal places before applying the next multiplier.
Step-by-step calculation:
Start with the base rate (e.g., $24.10).
Apply the first multiplier (e.g., X1.25 for casual loading).
Round the result to 2 decimal places using Fair Work rules.
Apply the next multiplier (e.g., X1.5 for time and a half).
Round the final result to 2 decimal places.
Fair Work Rounding Rules:
The Fair Work Commission specifies that amounts should be rounded to the nearest cent, with amounts ending in 5 or more rounding up.
Third Decimal Digit | Rounding Direction | Example |
0-4 | Round down | 30.124 -> 30.12 |
5-9 | Round up | 30.125 -> 30.13 |
Configuring Fair Work Rounding
Enabling Fair Work Rounding in Award Policies
Fair Work Rounding is enabled through the Award Policy configuration using the Enable Fair Work Rounding action. Follow the steps below:
Navigate to Payroll > Award Policies
Select the award policy you wish to configure
Edit the relevant rule where you want Fair Work Rounding to apply
Add the Enable Fair Work Rounding action to the rule
Save the award policy
Important: The Enable Fair Work Rounding action must be placed in the rule before any multiplier actions that should use Fair Work compliant rounding. All subsequent multipliers within that rule context will use sequential rounding.
Example:
Pre-Processor Rule Configuration (Recommended)
To apply the rule over all rate calculations, you can configure this as a pre-processor rules to enable the feature for all applicable pay items calculations within the award.
Follow the steps below:
Navigate to Payroll > Award Policies
Select the award policy you wish to configure
Add the Enable Fair Work Rounding action to the Pre-Processor section of the award
Save the award policy
Example:
How Pay Runs Use Fair Work Rounding
Automatic Application
Once Fair Work Rounding is configured in an award policy, it is automatically applied during pay run processing. No additional steps are required by payroll officers.
During pay run calculation:
The system identifies pay items with Fair Work Rounding enabled
For each pay item, multipliers are applied sequentially
Each intermediate result is rounded to 2 decimal places
The final rate is used for payment calculation
Viewing Calculated Rates
When reviewing a pay run, the calculated rates will reflect Fair Work compliant rounding. You can verify the rates by:
Opening the pay run
Reviewing the employee’s pay details
Checking the rate column for pay items with multipliers
Note: The displayed rate is the final calculated rate after all multipliers and rounding have been applied.
Backward Compatibility
Existing Pay Policies
Implementation of Fair Work Rounding does not affect existing pay policies or calculations that use the traditional method.
Key points:
Existing calculations continue to work unchanged.
Fair Work Rounding must be explicitly enabled for each award policy.
There is a clear distinction between old and new calculation methods.
No existing functionality is broken by the implementation.
Migration Considerations
If you need to transition existing policies to use Fair Work Rounding:
Review your current award policies.
Identify which Modern Awards require Fair Work compliant rounding.
Cease the current version of your award (Recommend ending to coincide with a pay period end date).
Create a new version of your award (Recommend starting to coincide with a pay period start date).
Update the relevant award policies to include the Enable Fair Work Rounding action.
Test the updated policies in a non-production environment.
Deploy the changes during a suitable pay period transition.
Important: When transitioning to Fair Work Rounding, be aware that calculated rates may differ slightly from previous calculations. Review and communicate any rate changes to affected employees as required.
Troubleshooting
Rates Not Matching Expected Values
Problem: Calculated rates don’t match the Fair Work Commission published rates
Solution:
Verify that the Enable Fair Work Rounding action is configured in the award policy
Check that the action is placed before the multiplier actions in the rule
Confirm the multiplier values are correct (e.g., 1.25 for casual loading, 1.5 for time and a half)
Review the calculation sequence to ensure multipliers are applied in the correct order
Fair Work Rounding Not Applied
Problem: Pay items are still using traditional rounding
Solution:
Check the award policy configuration for the affected pay items.
Ensure the Enable Fair Work Rounding action is present in the rule.
Verify the rule is active and applies to the correct pay items.
Republish the award policy if changes were made.
Rate Differences After Enabling Fair Work Rounding
Problem: Rates changed after enabling Fair Work Rounding
Solution:
This is expected behaviour when transitioning from traditional to Fair Work rounding.
The difference is typically small (a few cents) but ensures compliance
Review the Fair Work Commission published rates to confirm the new rates are correct.Document the rate changes for audit purposes.
Audit and Compliance
Reference Documentation
For more information on Fair Work Commission rounding requirements, refer to:
Frequently Asked Questions
Q: Does Fair Work Rounding apply to all pay items automatically?
A: No, Fair Work Rounding must be explicitly enabled in the award policy configuration. Only pay items processed through rules with the Enable Fair Work Rounding action will use sequential rounding.
Q: Will enabling Fair Work Rounding change my existing pay calculations?
A: Only for pay items where the feature is enabled. Existing calculations without the Enable Fair Work Rounding action continue to use the traditional method.
Q: How much difference does Fair Work Rounding make to rates?
A: The difference is typically small, often just a few cents. However, this ensures compliance with Fair Work Commission published rates. For example, a rate of $45.19 (traditional) may become $45.20 (Fair Work Rounding).
Q: Can I use Fair Work Rounding for some pay items and traditional rounding for others?
A: Yes, Fair Work Rounding can be configured at the rule level within award policies. You can have different rules using different rounding methods within the same policy.
Q: Does Fair Work Rounding affect leave calculations?
A: Fair Work Rounding applies to pay rate calculations where multipliers are used. Leave calculations that use the same award policy rules with Fair Work Rounding enabled will also use compliant rounding.
Q: What happens if I have multiple multipliers (e.g., casual loading + penalty rate + shift allowance)?
A: Each multiplier is applied sequentially, with rounding after each step. For example: Base rate x Casual loading = Result 1 (rounded) x Penalty rate = Result 2 (rounded) x Shift allowance = Final rate (rounded).
Q: Is Fair Work Rounding required for all Modern Awards?
A: Fair Work Rounding ensures compliance with Fair Work Commission rate calculation methods. Check your specific Modern Award requirements to determine if this feature should be enabled.
Q: How do I verify that Fair Work Rounding is working correctly?
A: Compare calculated rates against Fair Work Commission published rates for your Modern Award. The rates should match when Fair Work Rounding is correctly configured.
Getting Help
If you experience issues or have questions about Fair Work Rounding:
Review this guide for configuration and troubleshooting information.
Contact your system administrator for award policy configuration questions.
Refer to Fair Work Commission documentation for official rounding requirements.
Check the online help within Definitiv for additional guidance.
Contact support if you need assistance with configuration or calculations by raising a case online.