You may be left to fumble along wondering why your business isn’t the profit powerhouse your commercial cleaning business should be, or if too high you may wonder why you aren’t winning work.
Here we deep dive into the Cleaning Services Award, Quoting and Pricing, so that you can come away with a clear picture of what is required to build a profitable cleaning business.
If you don’t get this 100% out of the gates, then you’ll soon join the 60% of businesses in Australia which will fail within their first three years of operations, with 20% of businesses failing in their first year of operating. The figures just get more grime up until the 10 year mark where the failure rate hits the 80% mark.
As of 2022-2023, there has been 406365 business entries and 386392 business exits.
According to the Australian Banking Association, the reasons for small business failure include:
Take me to the freshOps Pricing Guide
The Cleaning Services Award is a set of legal minimum employment standards and conditions for those employed in the cleaning services industry in Australia.
It sets out the minimum wage rates, working hours, leave entitlements and other conditions for cleaners, trolley collectors, and employees of contract cleaning services businesses, specialist cleaning businesses, and labour hire businesses in the cleaning services industry in Australia.
The Cleaning Services Award aims to ensure that cleaning services workers and their assistants are treated fairly and receive reasonable pay and conditions for their work.
Awards are legal documents that outline the minimum pay rates and conditions of employment. For the Cleaning Services Award (MA000022), you would typically find information on:
This section details the minimum hourly wages for different types of employees within the cleaning industry, such as part-time, full-time, and casual workers, including any provisions for junior workers, trainees, or apprentices.
Outlines standard working hours, including maximum daily and weekly hours, and any rules regarding breaks, overtime, and penalty rates for working unsociable hours (nights, weekends, or public holidays).
Detail information on additional pay rates for work outside of normal hours, during weekends, public holidays, or overtime.
Specify allowances that employees might be entitled to, such as tool allowances, uniform or laundry allowances, travel allowances, or meal allowances under certain conditions.
Information on various types of leave, including annual leave, personal/carer’s leave, parental leave, and any other types of leave provided under the National Employment Standards (NES).
Rules around when breaks should be taken, how long they should be, and whether they are paid or unpaid.
Details on superannuation contributions and any other entitlements or provisions specific to the cleaning industry.
The Cleaning Award covers employers in the contract cleaning services industry and their employees who fit within the classifications of the award.
The contract cleaning services industry means providing cleaning services under a contract.
The Cleaning Award also covers labour-hire businesses and their employees who are placed with an organisation in the contract cleaning services industry.
This award covers the following employee categories:
The following employers and employees are not covered by the Cleaning Award:
The Cleaning Award doesn’t cover employers and employees when they are covered by one of the following awards:
Rather than work it all out yourself, the P.A.C.T. can be used to very easily determine exactly how much your cleaners should be paid. Below, we put together a quick guide on how you can use the calculator and also deep dive into how the rates have been developed, so you can also develop your Pay Rates correctly in your payroll tools.
The freshOps Xero Integration can also help do the grunt work when it comes to payroll. Our Payroll feature can send your cleaner’s timesheets straight into Xero without any manual data entry. Our Payrules Engine then analyses the time of day and day of the week of your cleaner’s work and applies the correct pay rate directly inside your Xero Timesheets.
This means that a cleaner works for 7 hours and 36 minutes every day from Monday to Friday. It’s a standard work schedule, similar to any other full-time job.
Example:
Alex works as a cleaner in an office building. They start at 8:30 AM and finish at 4:06 PM, Monday to Friday, cleaning offices and common areas.
Some workplaces operate on a schedule where employees get certain days off that are planned in advance, and over four weeks, a cleaner would work a total of 152 hours. This might mean working more on some days to cover when others are off.
Example:
Jordan cleans at a hospital and follows a schedule that adds up to 152 hours over four weeks. Some weeks Jordan works more days than others, compensating for days off that fit the hospital’s needs and the agreed roster.
Instead of sticking to a weekly schedule, the cleaner works 19 full days in a month, each day lasting 8 hours. This setup allows for more days off within the month, offering flexibility.
Example:
Sam is a school cleaner who works 8-hour shifts on 19 different days each month. This schedule means Sam has several weekdays off, allowing for personal appointments or relaxation.
By agreeing with their employer, cleaners can work longer days, up to 10 hours, in exchange for taking extra days off during the week. This arrangement offers even more flexibility.
Example:
Casey and their colleagues agreed with their cleaning company to work two 10-hour shifts every week. This allows them to take every Friday off, providing a long weekend to enjoy or run errands.
These points illustrate various flexible work arrangements available to cleaners, aiming to balance work commitments with personal life and preferences.
Let’s break this down for you, as a cleaning business owner, to understand how you can apply these work arrangements when employing cleaners, along with some examples.
This means you can schedule your part-time or casual cleaners to work for a maximum of 7 hours and 36 minutes each day, but they shouldn’t be working more than five days in any given week. It’s a flexible approach that allows you to cover your cleaning needs throughout the week without overworking your staff.
Example:
You manage a cleaning service that contracts with office buildings. You could schedule a cleaner, let’s call her Emily, to work from Monday to Friday, 8 AM to 3:36 PM, covering the peak hours when cleaning is most needed in offices. This schedule ensures that Emily has a consistent workload and that your client’s offices are maintained properly throughout the workweek.
You have the flexibility to schedule cleaning shifts on any day, depending on your business needs and the preferences of your cleaners. This means your cleaning staff can work weekends, evenings, or any days that suit the operations of your business and their personal schedules.
Example:
Suppose your business also provides weekend cleaning services for restaurants. Another cleaner you employ, Alex, prefers working on weekends due to his school schedule. You can arrange for Alex to work his shifts on Saturday and Sunday, ensuring that the restaurants are clean and ready for business during their busiest times. This setup is beneficial for both your business, which needs reliable weekend coverage and for Alex, who needs to balance work with his studies.
These guidelines offer a framework for creating work schedules that meet the needs of your cleaning business while also considering the well-being and preferences of your cleaners. By offering flexible scheduling options, you can maintain a motivated and efficient cleaning staff, which is key to running a successful cleaning service.
| Paid meal break | ● An employee who works a shift that attracts a shift penalty under Section Penalty Rates is entitled to a paid meal break per shift of not less than 20 minutes.
● The meal break must be taken at least 4 hours, and at least 5 hours, after the start of the shift. |
| Paid rest break | ● A full-time shift worker working a straight shift is entitled to one further 10-minute paid rest break per shift.
● A paid meal break and paid rest break count as time worked for the employee |
Minimum Rates
The wages that you pay your cleaners are based on the Minimum Hourly Rate and also determined by the experience and responsibilities of your cleaners.
CSE Level One (CSE 1): This initial level is for employees who clean and maintain buildings to keep them in a clean and hygienic condition.
Their tasks include a wide range of cleaning duties such as;
These employees work under routine supervision and are responsible for the quality of their own work, exercising discretion within their skill and training level.
CSE Level Two (CSE 2): Employees at this level have a higher skill level than CSE 1 and take on more complex tasks. They work from complex instructions, assist in on-the-job training, and work under general supervision.
Their responsibilities may include;
They also handle the ordering and distributing of cleaning materials and may be involved in more specialized cleaning tasks.
CSE Level Three (CSE 3): This level involves employees providing cleaning services with even higher skills than those at the CSE 2 level. They may perform any duties of CSE 1 or CSE 2, co-ordinate work, superintend building cleaners, and ensure quality of work.
Their role includes;
They are also directly involved in providing on-the-job training.
Each level represents a progression in responsibility, skill requirement, and the complexity of tasks performed, with CSE 3 being the most advanced, involving supervisory and coordination roles in addition to cleaning tasks.
Each CS Class has its own Minimum Hourly Rate
However, the rate you pay your cleaners then depends also on whether they are Full Time, Part-Time or Casual.
Basically, the Full Time Day Rate is the minimum rate you can pay a cleaner, but they have to be employed Full Time.
Overtime rates
The overtime rate payable to an employee depends on the time at which the overtime is worked:
| Overtime worked on | Full-time and part-time employees | Casual employees (includes casual loading) |
| % of minimum hourly rate | ||
| Monday to Saturday—first 2 hours | 150% | 175% |
| Monday to Saturday—after 2 hours | 200% | 225% |
| Sunday all day | 200% | 225% |
| Public holiday all day | 250% | 275% |
Penalty rates
When an employee works ordinary hours on the following days, they are entitled to the following penalty rates.
| Full-time adult employees | Part-time adult employees | |
| % of minimum hourly rate | ||
| Day | 100% | 115% |
| Early morning, afternoon and non-permanent night shift | 115% | 130% |
| Permanent night | 130% | 130% |
| Saturday | 150% | 165% |
| Sunday | 200% | 215% |
| Public holiday | 250% | 265% |
Allowance
There are a range of different allowances within the Cleaning Award. Some of the more popular are Broken Shift Allowances, Leading Hand Allowances and Toilet Cleaning Allowances.
For the full list of allowances visit the Cleaning Award – Section 17. Allowances
In the Cleaning Services Award, leave entitlements for employees are determined by the National Employment Standards (NES) and the classification of the employee.
Annual leave is provided for in the NES. It does not apply to casual employees.
During a period of paid annual leave, an employer must pay an employee an additional payment for the employee’s ordinary hours of work. The additional payment is payable on leave accrued.
For an employee who would have worked on day work only or worked on shiftwork had they not been on leave, the additional payment is the greater of:
Casual employees are entitled to be absent from work to care for a person who requires care or support because of:
but they’re not entitled to be paid for time away from work.
Sick leave can be used when an employee is ill or injured.
An employee may have to take time off to care for an immediate family or household member who is sick or injured or help during a family emergency. This is known as carer’s leave but it comes out of the employee’s personal leave balance.
Under the NES employees get:
An employee’s entitlement to paid sick and carer’s leave accumulates progressively during a year of service, based on their ordinary hours of work.
The entitlement to 10 days of sick and carer’s leave can be calculated as 1/26th of an employee’s ordinary hours of work in a year.
Sick and carer’s leave accumulates from year to year.
Sick and carer’s leave continues to accrue when an employee takes it or is on paid annual leave.
An employer must pay an employee who works on a public holiday or on a day that is substituted for a public holiday at the public holiday penalty rate set out in penalty rates.
To comply with the Cleaning Services Award in Australia, businesses in the contract cleaning services industry can follow:
| Minimum wage | Employers must pay their employees at least the minimum wage set by the Fair Work Commission. |
| Superannuation | Employers are obligated to make superannuation contributions on behalf of their eligible employees, which includes calculating and paying the correct amount on time. |
| Taxation | Businesses must accurately calculate and withhold income tax from employee wages, regularly passing the amount to the ATO. |
| Record-keeping | Employers are required to maintain comprehensive records relating to employee pay, taxes, superannuation and entitlements |
Quoting for commercial cleaning contracts might seem complicated at first, but it’s quite straightforward once you understand the basics.
Remember, not winning a contract isn’t the end of the world.
It simply means that particular client wasn’t the right fit for your business. Your aim is to find clients who see the value in your services and are willing to pay for quality.
Here’s the thing: your cleaning business needs to offer more than just cleaning staff. In the commercial cleaning sector, your job is to reliably provide cleaning services at a client’s location, ensuring tasks are completed thoroughly and consistently over time. This is where freshOps can help systemise your reliable and consistent services. The success of your business hinges on creating efficient systems and knowing exactly who your ideal client is while providing exceptional value to your customer.
To quote for a cleaning job, start by figuring out how long it will take for the cleaning tasks to be done for each visit.
For a consistent daily schedule, calculate the total hours your cleaner will work each day, multiply by the number of days services are provided weekly, then by your hourly RATE. Spread this cost over a year and divide by 12 to get a monthly rate.
For a varied schedule, calculate the total weekly hours, multiply by your hourly RATE, spread this to an annual cost, and divide by 12 for the monthly rate.
Businesses prefer predictable costs for budgeting. Monthly billing aligns with their accounting cycles, making your service a fixed cost they can plan for, unlike weekly billing which can vary from month to month.
Determining your hourly rate isn’t as simple as asking around on social media.
Your rate should reflect your specific business needs, including your market, target customers, and your company’s goals and values. It’s tempting to use others’ rates as a benchmark, but your business is unique.
Your rates should cover your costs, allow for profit, and reflect the value you provide.
If you don’t know where to start developing your unique rate, then download our “YOUR Rate Creator™ Template”
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