Apprenticeships and trainees in Australia
Reviewed by Mellow Editorial Team, HR & payroll content team
Apprentices and trainees in Australia are employees, which means they have most of the same entitlements as any other worker — but their pay rates, training obligations and some payroll mechanics work differently from a standard hire.
What makes an apprentice or trainee different
The defining feature is a training contract (sometimes called a registered training agreement), which is a formal agreement between the employer, the worker and a registered training organisation (RTO). The contract is registered with the relevant state or territory training authority.
An apprenticeship leads to a trade qualification, typically in construction, electrical, plumbing, automotive or similar fields. Apprenticeships generally run three to four years. A traineeship leads to a vocational qualification in areas such as business administration, retail or hospitality, and usually runs one to two years.
The distinction matters for pay rates, because modern awards set separate apprentice and trainee wage schedules — often expressed as a percentage of the relevant tradesperson or adult rate, rising in steps as the person progresses through their training year.
Pay rates and award obligations
Most apprentices and trainees are covered by a modern award. The award will specify the applicable minimum rates by year of apprenticeship or traineeship stage, and sometimes by the age of the worker. Because these percentages change as the person moves from year one to year two and so on, you need to review and adjust pay each time they progress — it does not happen automatically.
Some key points to confirm for each engagement:
- Which modern award applies (this depends on the industry and the role, not the qualification being studied)
- Whether an enterprise agreement covers the workplace instead, and whether it meets the award minimum
- Whether the worker is an adult apprentice — some awards have a separate, higher floor for apprentices who are 21 or older at the time they start
The Fair Work Commission reviews national minimum wage rates annually, and award apprentice rates move with those decisions. Check the current schedules on the Fair Work Ombudsman website each time a change takes effect.
Superannuation and leave entitlements
Apprentices and trainees are employees, so the Superannuation Guarantee applies. From 2026, that rate is 12% of ordinary time earnings, paid to a complying fund at least quarterly. There is no exemption for apprentices based on age or income, so contributions must be made from the first dollar earned if STP reporting is active.
Under the National Employment Standards, apprentices and trainees also accrue four weeks of paid annual leave per year on a pro-rata basis, along with personal/carer's leave, compassionate leave and other NES entitlements. The fact that they are in training does not reduce these minimums.
One area to check carefully: time spent in off-the-job training (attending the RTO). Under most awards, this time is treated as paid ordinary hours. That means you may be required to pay the apprentice their normal rate while they are in class, not just while they are on the tools. The specific rule varies by award, so confirm the obligation for your industry before the training schedule is set.
Payroll mechanics and reporting
Apprentices and trainees sit inside your normal payroll process. You withhold income tax via PAYG at the rate that applies to their earnings, report each pay event through Single Touch Payroll, and finalise by 14 July after the end of the financial year. If the worker has a HECS/HELP debt and their income exceeds the relevant band threshold, you also withhold the applicable repayment amount from each pay.
Because apprentice award rates step up at fixed intervals, it helps to set a calendar reminder for each anniversary or stage progression date. A missed rate increase creates a wages underpayment, which is a Fair Work compliance issue regardless of whether it was deliberate.
If you are employing your first apprentice and are uncertain about the how Mellow runs payroll across six countries, it is worth noting that STP-enabled payroll software can carry apprentice rate tables and flag when a step-up is due — reducing the manual tracking burden significantly.
Government incentives and subsidies
State, territory and federal governments periodically offer wage subsidies, payroll tax exemptions or incentive payments to employers who take on apprentices or trainees, particularly in priority occupations facing skill shortages. These programs change regularly and eligibility criteria vary.
The Australian Apprenticeships Incentives Program is the main federal scheme. Your Australian Apprenticeships Support Network (AASN) provider — assigned when the training contract is registered — can confirm what subsidies apply to your specific situation. Payroll tax treatment of any subsidy you receive will depend on your state or territory rules, so check with your accountant or state revenue office before treating it as exempt.
Ending an apprenticeship or traineeship
A training contract can be completed, cancelled or suspended. If the employment also ends, standard termination rules apply: notice periods under the award or contract, accrued annual leave paid out, and any redundancy entitlements that apply under the NES scale based on years of service. Most apprentices and trainees are not long enough in the role to trigger redundancy pay, but it is worth confirming if the person has been with you for an extended period.
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