Rostered Day Off

What is a rostered day off (RDO)?

A rostered day off (RDO) is a scheduled day off work that an employee earns by working additional hours over a period of time. It’s typically part of an employee’s working arrangement under an award, enterprise agreement, or employment contract in Australia. RDOs are prearranged within the employee’s roster and can be either paid or unpaid, depending on the specific agreement and industry.

When RDOs are paid, it’s usually because the employee has worked extra time—beyond their standard daily hours—which accumulates over a set period and is later taken as time off. This system is common in sectors like construction, manufacturing, trade, and contract centers. For example, in the building and construction industry, it’s typical for employees to work 8-hour days instead of 7.6 hours for 19 consecutive days, then take the 20th day as a paid RDO.

How does a rostered day off work?

In industries where RDOs are part of workplace agreements, understanding how they operate can help both employers and workers plan ahead. Below is an overview of how RDOs are accrued, scheduled, and managed across different settings in line with rostered day-off guidelines.

Accumulation of extra hours

Employees work additional hours each day (e.g., 8.5 or nine hours instead of a standard 7.6 or eight). These extra hours are “banked” and tracked over a period—such as a fortnight or month—until they add up to a full day off. While the RDO may feel like a free paid day, the employee has already worked the hours in advance.

Scheduled day off

Once enough hours are accrued, the employee takes a paid rostered day off as agreed in their workplace award, enterprise agreement, or employment contract. The RDO is scheduled in advance, either on a fixed cycle (e.g., every second Friday) or flexibly, depending on workload.

Industry-specific agreements

Different awards and agreements outline the rostered day off guidelines, including how many can be taken and how they should be managed. Some industries may have restrictions on accumulating or banking RDOs.

Pay and leave considerations

RDOs are considered paid time off since the employee has already worked the required hours. If an employee is unwell on a scheduled RDO, it generally remains recorded as an RDO and is not converted to sick leave unless stated otherwise in the agreement.

What is the difference between ADO and RDO days off?

While ADOs (Accrued Days Off) and RDOs (Rostered Days Off) share the common goal of providing employees with paid time off, their specific implementation can vary between industries and organizations.

The benefits of rostered days off

• Better work-life balance: Having a scheduled day off lets employees rest, handle personal matters, or enjoy extended weekends.
• Increased productivity: Employees return to work refreshed and more focused, leading to improved performance.
• Reduced fatigue: Regular breaks help prevent burnout and reduce the risk of errors caused by exhaustion.
• Higher job satisfaction: Knowing they have scheduled time off boosts employee morale and engagement.
• Flexibility for personal commitments: Employees can use RDO leave to attend appointments, run errands, or spend time with family without taking additional leave.
• Enhanced staff retention: Offering structured time off can make your workplace more appealing and help retain experienced employees.

HR tip

According to SEEK’s, 25% of Australians would like a monthly RDO—and that’s not including those who already get them.

How is an RDO calculated?

An RDO is calculated by accruing extra hours worked by an employee over a set period. Here’s how it works:

• Employees work additional hours each day beyond their standard work hours (e.g., 8.5 or nine hours instead of eight).
• These extra hours aren’t paid out immediately. Instead, they’re “banked” and credited toward a future day off (RDO).
• For example, if an employee works a 40-hour week but is only paid for 38 hours, the remaining two hours are accrued as RDO time.
• Over four weeks, those two hours per week add up to eight hours—enough for one full paid day off (based on a 7.6- or eight-hour workday).

You might see this represented as:

Hours in a pay period = (Hours in a working day ÷ RDO frequency in weeks) × Number of weeks in pay period

Did you know?

RDO leave time is taxed when it is taken, not when it is accrued, and superannuation contributions and entitlements are calculated based on ordinary time earnings and include RDOs.

What to include in a rostered day off (RDO) policy

A well-structured RDO policy ensures consistency, fairness, and compliance with employment laws. HR professionals should include the following key elements:

1. Purpose of the RDO policy

• Define who the policy applies to (e.g., full-time employees, staff under certain awards, or specific departments).
• Explain how the policy supports broader company goals, such as promoting work-life balance or managing workloads.

2. Compliance with awards and enterprise agreements

• Reference the applicable modern award or enterprise agreement that governs the organization.
• Clarify how the policy applies to different employee groups if multiple agreements are in place.
• Ensure compliance with Fair Work Australia regulations to prevent disputes or breaches.

3. RDO accrual and entitlement

• Outline how RDOs are earned (e.g., as part of a 9 day fortnight, 19-day month, or other work cycle).
• State how many hours need to be worked to qualify for an RDO.
• Include rules around whether unused RDOs can be carried forward, banked, or cashed out (if permitted under relevant employment agreements).
• Mention any pro-rata entitlements for part-time employees, if applicable.

4. Scheduling and approval process

• Specify how far in advance RDOs must be scheduled and approved.
• State whether employees can swap or change their RDOs and under what conditions.
• Define the process for requesting an alternative RDO day if the scheduled one falls on a public holiday.
• Mention any peak periods or blackout dates when RDOs may not be taken due to business needs.

5. Payment and payroll considerations

• Confirm whether RDOs are paid at the employee’s ordinary rate.
• Note how RDOs are recorded in the payroll system and timesheets.
• Explain how RDOs are handled if an employee is on leave or terminates employment.

6. Impact on leave and overtime

• Specify whether RDOs can be taken alongside annual leave or sick leave.
• State if RDOs can be used as an alternative to taking time off in lieu or overtime payments.

7. Managing RDOs during business closures

• Explain how RDOs are managed during company shutdowns (e.g., over Christmas)
• Note whether employees can be required to use their RDOs during low-demand periods
• Mention any technologies or HR systems used for tracking RDO balances.

8. Review and policy updates

• Regularly assess compliance with employment law changes and industry standards
• Ask for employee and manager feedback to improve the policy’s effectiveness
• Communicate any updates or amendments to employees in a timely manner.

HR tip

Accurate recordkeeping is essential. Employees and managers should track RDO accrual and usage consistently, and HR/payroll teams should maintain up-to-date records for audit and compliance purposes.

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