Does Australian Law Require Overtime Pay?
Yes — but with important nuance. The Fair Work Act sets a maximum of 38 ordinary hours per week for full-time employees, plus any additional hours that are deemed reasonable. Beyond 38 hours, whether overtime rates apply depends on your modern award, enterprise agreement, or individual contract.
Most modern awards do require penalty rates and overtime payments for hours worked beyond ordinary time. If you're unsure how much you should be earning, start with our Overtime Pay Calculator to model your rate against your actual hours.
What Counts as Overtime?
Overtime generally refers to time worked:
- Beyond 38 hours per week (for full-time employees)
- Beyond the daily spread of hours in your award (often 8–10 hours per day)
- Outside the ordinary hours bandwidth specified in your award (e.g. before 6am or after 10pm)
- On weekends or public holidays, which may attract separate penalty rates
The definition of "ordinary hours" varies by award, so the trigger point for overtime is not universal. A retail employee and a manufacturing worker may be on completely different overtime thresholds.
Common Overtime Rates by Award
Most modern awards prescribe overtime at one of the following rates:
| Scenario | Typical Rate |
|---|---|
| First 2–3 hours beyond ordinary daily hours | Time and a half (150%) |
| After the first 2–3 hours of overtime | Double time (200%) |
| Sunday work (some awards) | Double time (200%) |
| Public holidays | Double time and a half (250%) |
| Recall to duty or overtime on day off | Double time (200%) with a minimum engagement period |
These are minimums — enterprise agreements or individual contracts can provide higher rates. Use our Hourly Rate Calculator to first confirm your base rate before applying overtime multipliers.
Do Salaried Employees Get Overtime?
It depends. Many salaried (annualised wage) arrangements include an explicit or implicit trade-off where a higher salary covers some or all overtime. However, under modern award rules, an employer must conduct a regular reconciliation (usually annually) to confirm the annualised wage actually covers all overtime worked. If it doesn't, the difference must be paid.
If you are on an annualised salary under an award and working significant overtime, your employer should be tracking your hours and reconciling at least once a year. If they're not, that's a compliance issue.
Time Off in Lieu (TOIL)
Some awards allow overtime to be compensated with time off in lieu instead of cash, provided:
- The employee agrees in writing
- The time off is equivalent to the overtime penalty rate (not just an hour for an hour)
- The time off is taken within a set period (often within 6 months)
TOIL that isn't taken within the agreed timeframe usually converts back to a payment obligation. Always confirm the TOIL terms in your award or agreement.
Reasonable Overtime and the Right to Refuse
Under the Fair Work Act, an employer can require an employee to work reasonable additional hours — but an employee may refuse unreasonable overtime. What's unreasonable depends on factors including:
- The health and safety risks
- How much notice was given
- The employee's personal circumstances (family responsibilities)
- Usual industry patterns
- Whether they're compensated for the additional hours
There is no cap on total hours per week in the Act beyond the "reasonable" test, but regularly working 50, 60, or 70 hours without compensation raises both compliance and safety concerns.
Keeping Track of Your Hours
The best protection against underpaid overtime is accurate timekeeping. Our Work Hours Calculator makes it easy to total your hours across a shift or pay period. If you want to get serious about HR compliance or understand the legislation yourself, employment law reference books are a practical investment — check out the employment law titles on Amazon AU for options used by HR professionals and business owners.
What to Do If You're Owed Overtime
If you believe you've been underpaid overtime, you have up to 6 years to recover the debt under the Fair Work Act. Steps to take:
- Gather your timesheets, rosters, and payslips
- Calculate the shortfall using the correct award rate
- Raise it with your employer first — many underpayments are genuine errors
- If unresolved, lodge with the Fair Work Ombudsman