Staying back late on a Friday, picking up a Sunday shift, or covering a public holiday — extra hours in Australia usually attract extra pay. But the exact amount depends on two separate systems: overtime rates and penalty rates. Mix them up and your pay calculation can be well off, so this guide walks through how each one works, the typical rates paid across modern awards, and worked examples based on Australia’s current minimum wage.
Before we start: the figures below are typical patterns, not guarantees. Australia has over 120 modern awards, plus enterprise agreements that can override them. Your award sets the exact rates, and you can look yours up on the Fair Work Ombudsman Pay and Conditions Tool. Use this guide to understand the system; use the tool to confirm your numbers.
Key rates at a glance
The numbers below are based on Australia’s National Minimum Wage from 1 July 2025: $24.95 per hour. Casuals receive a 25% casual loading on top, making the casual minimum $31.19 per hour. The penalty multiples apply to your ordinary hourly rate (which already includes the loading for casuals).
| When you work | Typical rate | On $24.95/hr | On $31.19/hr (casual) |
|---|---|---|---|
| Overtime Mon–Fri (first 2 hours) | 150% (time and a half) | $37.43/hr | $46.79/hr |
| Overtime Mon–Fri (after 2 hours) | 200% (double time) | $49.90/hr | $62.38/hr |
| Saturday overtime (first 2 hours) | 150% | $37.43/hr | $46.79/hr |
| Saturday overtime (after 2 hours) | 200% | $49.90/hr | $62.38/hr |
| Sunday (whole shift) | 200% | $49.90/hr | $62.38/hr |
| Public holiday | 250% | $62.38/hr | $77.98/hr |
| Saturday (penalty, ordinary hours) | ~125% | ~$31.19/hr | ~$38.99/hr |
| Sunday (penalty, ordinary hours) | 150–175% | $37.43–$43.66/hr | $46.79–$54.58/hr |
| Evening shift (after ~6pm) | 115–130% | $28.69–$32.44/hr | $35.87–$40.55/hr |
Want to run your own numbers? Our overtime calculator applies these standard multipliers to your hourly rate so you can estimate what a given shift should pay.
Overtime vs penalty rates: they’re not the same thing
These two terms are constantly confused, but they cover different situations:
- Overtime is for hours worked beyond your ordinary hours — the 38-hour full-time week (or your part-time/casual ordinary hours under your award). If your ordinary day ends at 5pm and you stay until 7pm, those 2 hours are overtime.
- Penalty rates are loadings for working at unsociable times — weekends, evenings, early mornings, public holidays — even when those hours fall within your ordinary hours. If your ordinary roster includes Sunday shifts, you still get the Sunday penalty rate for them.
Put simply: overtime pays for extra hours; penalty rates pay for extra-unsociable hours. In some cases both could apply to the same hours, but most awards specify which rate wins — usually you get the higher of the two, not both stacked. Check your award.
The typical overtime pattern across modern awards
While each award differs in detail, a very common structure across Australian modern awards is:
- Monday to Friday: the first 2 overtime hours paid at 150% of the ordinary rate (time and a half), then 200% (double time) after that.
- Saturday: first 2 hours at 150%, then 200%.
- Sunday: 200% for all overtime hours.
- Public holidays: commonly 250% — double time and a half — for all hours worked.
Again: these are common patterns — your award sets the exact rates. Check the Fair Work Ombudsman Pay and Conditions Tool before assuming they apply to you. Some awards also require a minimum engagement for overtime (e.g. a minimum 3 hours’ pay when called in), and most awards require employees to actually be authorised or directed to work the overtime — simply hanging around the office doesn’t count.
Weekend and evening penalty rates (indicative)
Separate from overtime, penalty rates apply to rostered ordinary hours worked at unsociable times. Indicative ranges:
- Saturday: commonly around 125% of the ordinary rate for ordinary hours on a Saturday.
- Sunday: commonly 150–175%, depending on the award.
- Evening shifts (typically starting after 6pm): commonly 115–130%.
- Public holidays: commonly 250% whether the hours are ordinary or overtime.
These are indicative only and vary widely by award. Retail, hospitality, healthcare, and fast-food awards each have their own tables, and some pay higher weekend penalties than others. The Fair Work Ombudsman tool is the definitive source.
Worked examples on the $24.95 minimum wage
Example 1: 3 overtime hours on a weekday
You work 3 hours past your ordinary hours on a Tuesday. Under the typical Mon–Fri pattern:
- First 2 hours × $37.43 (150%) = $74.86
- 3rd hour × $49.90 (200%) = $49.90
- Total overtime pay: $124.76
Without overtime rates, those 3 hours would have paid $74.85 — the overtime structure adds almost $50.
Example 2: an 8-hour Sunday shift
A full 8-hour shift worked on a Sunday at the typical 200% rate:
- 8 hours × $49.90 (200%) = $399.20
That’s $199.60 above ordinary pay for the same shift. For a casual on the $31.19 minimum, the same Sunday shift at 200% pays $499.04 — penalty rates stack with the casual loading.
Example 3: a 4-hour public holiday shift
- 4 hours × $62.38 (250%) = $249.52
This is why public holiday shifts are the best-paid in the award system — and why awards sometimes also guarantee a minimum number of hours’ pay when you’re rostered on.
To model your own roster with your actual rate, try the overtime calculator — for example, see how overtime scales on a $25/hour wage or a $30/hour wage.
Do salaried workers get overtime?
It depends on your coverage. Salary doesn’t automatically exempt you from overtime rules:
- If you’re covered by a modern award, the award’s overtime provisions still apply to you even if you’re paid a salary. Many awards allow the salary to “absorb” overtime — but only up to the point where the salary still covers what you’d have earned hourly including penalties. If it doesn’t, your employer owes you the shortfall.
- If an enterprise agreement covers you, its terms decide.
- If you’re award-free (many higher-paid professional roles), your contract decides. Some contracts include “reasonable overtime” without extra pay; others pay overtime rates or provide time off in lieu.
- Some senior or managerial roles are exempt from award overtime provisions altogether.
If you’re salaried and regularly working unpaid extra hours, check whether your award applies — many salaried workers are covered without realising it.
Time off in lieu (TOIL)
Instead of paying overtime rates, some employers offer time off in lieu (TOIL) — paid time off instead of the overtime payment. This is only allowed if your award or agreement permits it, and generally requires both parties to agree. Your employer can’t impose TOIL unilaterally where the award requires overtime payment.
Common conditions include taking the time off within a set period (often 6 months), and some awards require TOIL to be at the overtime equivalent — i.e. 2 overtime hours at 150% = 3 hours of TOIL. If the time off isn’t taken within the window, the overtime must be paid out.
Casuals and penalty rates
Casual employees can also receive overtime and penalty rates on top of their 25% casual loading, according to award rules — the worked examples above show this (the casual minimum of $31.19 × 200% = $62.38/hr on a Sunday). Some older awards calculated penalties on the base rate before loading, so this is one area where checking the specific award text genuinely matters. Under most modern awards, penalties are calculated on the ordinary rate including the loading.
Overtime pay and tax
All overtime and penalty earnings are taxable ordinary income — they’re taxed under the 2025–26 resident tax brackets like everything else:
- $0–$18,200: nil
- $18,201–$45,000: 16%
- $45,001–$135,000: $4,288 + 30% over $45,000
- $135,001–$190,000: $31,288 + 37% over $135,000
- $190,001+: $51,638 + 45% over $190,000
- Plus the 2% Medicare levy
A common surprise: a big overtime week can look like it was “taxed more” on your payslip. That’s just withholding — payroll systems annualise that fortnight’s higher pay, so more tax is withheld that pay cycle. It all reconciles when you lodge your tax return, and you get any over-withholding back as a refund. Overtime is never taxed at a special higher rate.
FAQ
What is “time and a half” in Australia?
Time and a half means 150% of your ordinary hourly rate — your normal rate plus a 50% loading. On the $24.95 minimum wage, time and a half is $37.43/hr. Under many modern awards it’s the standard rate for the first 2 hours of Monday–Friday and Saturday overtime.
Are penalty rates the same in every award?
No. There are over 120 modern awards and they set their own penalty and overtime tables. The patterns in this article are common, but your award may pay more, less, or structure them differently. The Fair Work Ombudsman Pay and Conditions Tool gives the exact rates for your award and classification.
Do salaried workers get overtime?
Sometimes. If a modern award covers you, its overtime provisions apply even if you’re salaried — the salary can only absorb overtime if it genuinely covers what the award would have paid. Award-free roles depend on the contract; many include “reasonable overtime” without extra pay, while others pay overtime or offer TOIL.
Is overtime taxed more than regular pay?
No. Overtime is taxed at the same marginal rates as your ordinary pay under the 2025–26 brackets. A heavy overtime pay cycle can trigger higher PAYG withholding that week (because the system annualises the higher amount), but it reconciles at tax time — you’re never taxed at a penalty rate on overtime.
What is TOIL?
TOIL (time off in lieu) is paid time off taken instead of overtime payment. It’s only available if your award or agreement allows it and both you and your employer agree. Some awards require it to be paid at the overtime equivalent (e.g. 2 hours at 150% = 3 hours off), and it usually must be taken within a set period or paid out.
What should I do if my employer underpays penalties?
Start by checking your award rates on the Fair Work Ombudsman Pay and Conditions Tool and comparing them against your payslips — keep records of your actual hours. Raise it with your employer in writing first; many underpayments are payroll errors. If it isn’t resolved, you can lodge a complaint with the Fair Work Ombudsman, which can investigate and recover underpayments.
Conclusion
Overtime and penalty rates are how Australia’s award system compensates you for extra hours and unsociable times — from 150% for the first couple of weekday overtime hours up to 250% on public holidays. The exact rates depend on your award, so verify them on the Fair Work Ombudsman Pay and Conditions Tool. Then work out what your shifts are really worth with our overtime calculator, and remember those extra earnings feed into your annual taxable income — useful to know when you estimate your take-home pay for 2025–26.