Modern Award changes – Fact Sheet 2 – Industry allowance

In addition to paying the industry allowance, you may also be required to pay other allowances which are incidental to and depend on the nature of the work the employee is carrying out. For example, an employee engaged in the construction or renovation of a multi-story building may be entitled to a multi-storey allowance.

Frequently asked questions regarding industry allowance

How does the industry allowance apply?

The allowance is broken into two categories:

1. General building and construction industry, civil construction industry and metal and engineering construction industry — an allowance of 6% of the weekly standard rate or
2. Residential building and construction industry — an allowance of 4.8% of the weekly standard rate.

The key to knowing which industry allowance applies is determining whether the works fall within the definition of the residential building and construction industry.

When does the residential construction industry allowance apply?

The residential building and construction industry allowance applies when the following activities are undertaken in relation to a ‘single occupancy’ or ‘dual occupancy’ residential building which is less than five storeys:

• the construction, alteration, extension, restoration, repair, demolition or dismantling of buildings, structures or works that form, or are to form, part of land
• site clearance, earth-moving, excavation, site restoration, landscaping and the provision of car parks and other access works associated with the activities within the above work and 
• the installation in any building, structure or works of fittings and services.

The key to determining if the residential allowance will apply is assessing whether the works relate to a single or dual occupancy dwelling under 5 storeys.  Problematically ‘single occupancy’ and ‘dual occupancy’ dwellings are not defined within the Onsite Award. 

HIA provides the following guidance

The residential construction industry allowance is likely to apply to construction works which are:

• less than 5 storeys high and
• consist of 1 or 2 ‘residential living spaces’ (e.g.- two separate kitchens, two separate main bedrooms, etc), which could include:
  • single or dual occupancy dwellings
  • a duplex development
  • townhouses
  • a house and a granny flat and
  • dual occupancy units on the same title.

Importantly these examples will not be exhaustive. We always recommend that where it is not clear if works fall within the scope of this definition, to contact HIA. Understanding of this provision will evolve over time.

How is the industry allowance calculated?

It is not a simple matter of adding the 4.8% or 6% to the employee’s hourly rate.  The percentage applies to the ‘weekly standard rate’, which as per clause 2 of the Onsite Award, is the weekly minimum wage for Level 3 (CW/ECW 3).

Never fear however, HIA will make understanding this process simple through our wage sheets.

Are there any other allowances?

Yes, the following allowances are included within the Onsite Award:

• Site and general wage allowances: Industry, underground, multistorey, laser operation, laser safety officer allowance, carpenter diver, air-conditioning industry and refrigeration industry, first aid, electricians licence, in charge of plant
• Special rates: computing quantities, scaffolding or rigging certificate allowance
• Expense allowances: tool and employee protection, meal, compensation for clothes and tools and
• Travel, living away from home, and inclement weather.

This information is part of a series of updates on the Modern Award changes aimed at assisting members understand the requirements. More information can be found in the articles in the ‘What to read next’ section.