EBA clauses
RDO Rules in Construction EBAs: Accrual, Buyback and Payment
15 minutes, your EBA, no sales script.
The structure
36 hour week or 38 hour week?
A 38 hour week worked on a 36 hour roster is the classic construction pattern. Eight hours on site, 7.6 paid, 0.4 banked. Over twenty working days that is one paid RDO. A genuine 36 hour week is different again: the roster already includes the day off, so there is nothing to bank and nothing to buy back.
Work 8.0, get paid 7.6, accrue 0.4. That formula is almost never printed in the agreement, so payroll either derives it or guesses it.
The roster is in the clause
Published RDO calendars, state by state, with substitute days for picnic days and shutdowns.The arithmetic is not
Attendance hours, paid hours and banked hours have to reconcile, and the agreement rarely spells that out.
Accrual method
Daily accrual or pro-rata accrual?
Daily accrual credits 0.4 hours for each day attended. Pro-rata accrual credits 0.1 hours for each hour worked. On a site where every day is a full day the two agree exactly. On a site with wet weather, early finishes and part days they diverge quickly, and one of them is wrong for your agreement.
Daily accrual (0.4 per day)
- How it credits
- A flat 0.4 hours for any day attended
- Where it fits
- Crews on consistent full standard days
- Failure mode
- A two hour day banks the same as a full day
Pro-rata accrual (0.1 per hour)
- How it credits
- 0.1 hours for every hour actually worked
- Where it fits
- Sites with part days, rain days and early knock-offs
- Failure mode
- Over-accrues if applied to overtime hours as well as ordinary
Project Payroll
- How it credits
- The method your clause requires, tested against a real historic run
- Where it fits
- Either pattern, per agreement, per crew
- Failure mode
- None. The method and the clause are stored with the pay run
| Approach | How it credits | Where it fits | Failure mode |
|---|---|---|---|
| Daily accrual (0.4 per day) | A flat 0.4 hours for any day attended | Crews on consistent full standard days | A two hour day banks the same as a full day |
| Pro-rata accrual (0.1 per hour) | 0.1 hours for every hour actually worked | Sites with part days, rain days and early knock-offs | Over-accrues if applied to overtime hours as well as ordinary |
| Project Payroll | The method your clause requires, tested against a real historic run | Either pattern, per agreement, per crew | None. The method and the clause are stored with the pay run |
The edge cases
Accrual on an RDO, and RDOs that get worked
Two questions decide whether a balance is right twelve months from now. Does a paid RDO itself accrue, and what happens when the crew works the RDO anyway.
Accrual on the day taken
Industry practice commonly keeps accruing, because the day is ordinary time. The Fair Work position follows hours actually worked unless the agreement says otherwise. We settle it on the clause text, not on habit.RDO worked means extra accrual
The balance is not drawn down, the penalty or overtime rate applies, and in most agreements the day accrues again on top.
Reconciling RDO balances against the clause…
Payment
7.2, 7.6 or 8.0 hours on the day taken?
The payment on a taken RDO has to equal the value that was banked. If 0.4 hours a day were banked against 8.0 hour attendance, the RDO is worth 8.0 hours. Paying 7.6 short-pays every RDO by 0.4 hours. Paying 8.0 against a 7.2 hour bank over-pays every RDO. Multiply by a hundred workers and eleven RDOs a year and the number stops being small.
Neither error appears on one payslip. Both are systematic, and both compound quietly until a back-pay calculation forces the reconciliation.
The config trap
Negative rate times negative hours pays money out
The classic RDO configuration bug. The accrual line is entered as negative hours to bank the value, and the buyback rate is entered as a negative rate to reverse it. Two negatives multiply to a positive, so instead of drawing the balance down, the pay run pays the worker again. Gross looks slightly high, nobody queries it, and the leave balance never moves.
How it hides
The dollars land in a legitimate-looking pay category and the hours-only leave report shows a balance that never changes.How Employment Hero and KeyPay handle it
Accrual belongs in a pay condition rule set that splits attendance into paid and banked hours. The balance and the buyback rate belong in a leave category. Get the sign convention right in one place and the run reconciles.
Related reading: tying RDO dollars back to the journal and migrating leave balances in dollars, not just hours .
RDO questions
What is the notional hours buyback formula for RDOs?
On a 38 hour week with a 36 hour roster, a worker attends 8.0 hours a day, is paid 7.6 hours at ordinary rates and accrues 0.4 hours towards the RDO. The 0.4 is bought back and paid when the RDO is taken. Most agreements never write the formula down, they only state the roster and the week, so payroll has to derive it.
Should RDOs accrue at 0.4 per day or 0.1 per hour worked?
Daily accrual of 0.4 suits crews that work full standard days, and it is what most construction EBAs assume. Pro-rata accrual of 0.1 per hour worked is the right treatment when part days, early knock-offs and inclement weather are common, because a four hour day should not accrue a full day's RDO credit. The agreement, and the way the site actually works, decides which one is correct.
Do RDOs accrue on the day an RDO is taken?
Industry practice in construction is commonly to keep accruing on a paid RDO, because the agreement treats the day as ordinary time. The Fair Work position is that accrual follows the hours actually worked unless the agreement says otherwise. The two readings produce different balances over a year, so we settle it against the clause text during the EBA build and record the decision.
What happens if a worker works on their RDO?
The day is worked, so it does not draw down the balance, and in most agreements it accrues again on top of whatever penalty or overtime rate applies. Payroll that only reverses the drawdown loses the extra accrual, which shows up months later as a balance that is too low.
Why does paying an RDO at 7.6 hours instead of 8.0 cause underpayment?
Because the payment must match what was banked. If the crew accrued 0.4 hours a day against 8.0 hour attendance, the RDO is worth 8.0 hours of banked value, not 7.6. Pay 7.6 and every RDO short-pays 0.4 hours. Pay 8.0 where the agreement only banks 7.2 and every RDO over-pays. Neither error is visible on a single payslip, both are systematic.
How is an RDO configured in Employment Hero or KeyPay?
The accrual sits in a pay condition rule set that tests the shift against the roster and splits the day into paid hours plus accrued hours, and the balance sits in a leave category with the buyback rate set so a taken RDO pays the banked value. The trap is the config where a negative rate meets negative hours and produces a positive payment, which silently adds money to the run instead of drawing the balance down.
Reviewed August 2026. General information, not legal advice.
Your agreement
Do your RDO balances reconcile?
Send us the agreement and your last real pay run. We'll tell you whether the accrual method, the buyback and the payment hours agree with each other.
15 minutes, your EBA, no sales script.
Get my audit results
Nine questions, plain English, and the fix for each one you fail.
No lock-in · Published pricing · We reply within one business day