Overtime Pay in Australia (2026): The 38-Hour Limit, Reasonable Additional Hours, Award Rates and Time Off in Lieu

Overtime is where many Australian underpayments hide. The base hourly rate is usually right; the problem is the extra hour at the end of a shift, the Saturday stocktake or the part-timer who stayed back, paid at ordinary rates or not at all. This guide explains overtime pay in Australia for 2026: the 38-hour maximum in the National Employment Standards (NES), when additional hours are reasonable and when they can be refused, how awards decide when overtime starts, the rates in the General Retail, Hospitality and Clerks awards, time off instead of overtime pay, and how overtime is treated for super and tax. The worked examples use award rates from 1 July 2026.

Quick answer

Under the NES an employer can't ask a full-time employee to work more than 38 hours a week unless the extra hours are reasonable, and employees can refuse unreasonable overtime. Awards decide when overtime rates apply and how much they are — commonly 150% for the first 2 or 3 hours and 200% after that, with higher rates on Sundays and public holidays. Many awards allow time off instead of overtime pay by written agreement, taken within 6 months. Overtime generally isn't ordinary time earnings, so no super guarantee is due on it.

• Retail: 150% for the first 3 hours, then 200%

• Hospitality: 150% for the first 2 weekday hours, then 200%

• Part-timers get overtime beyond their agreed hours under most awards

• Award-free employees have no statutory overtime rate

• Overtime is usually calculated daily, not weekly

What counts as overtime

The Fair Work Ombudsman describes overtime as work done outside the ordinary hours set by the employee's award, enterprise agreement or contract. That can mean:

• hours beyond the maximum daily or weekly ordinary hours;
• hours beyond a part-time employee's agreed hours; and
• hours worked outside the span (or spread) of ordinary hours — the times of day ordinary hours can be worked, such as 7 am to 7 pm.

That last trigger catches many employers out. Under the Clerks—Private Sector Award, ordinary hours can only be worked between 7.00 am and 7.00 pm Monday to Friday and 7.00 am and 12.30 pm on Saturday. An office worker who does a normal 7.6-hour day but starts at 6 am has worked an hour outside the spread, and that hour is overtime even though the weekly total hasn't changed. The General Retail Industry Award's span is wider — 7.00 am to 9.00 pm on weekdays, 7.00 am to 6.00 pm on Saturday and 9.00 am to 6.00 pm on Sunday — with extensions to 11 pm for shops that trade late.

Ordinary hours worked at weekends or at night are not overtime. They attract penalty rates instead, which our award wages guide covers. Overtime and penalty rates usually don't stack: an hour is either ordinary time (with any penalty) or overtime (at the overtime rate), unless the award says otherwise.

Overtime at a glance (2026)

38 hours

NES maximum for full-time

plus reasonable additional hours

150%

Usual first-hours rate

first 2–3 hours, by award

200%

After that and on Sundays

most awards

6 months

To take time off in lieu

or it's paid out

The NES 38-hour limit and reasonable additional hours

Section 62 of the Fair Work Act sets the maximum weekly hours. An employer must not request or require an employee to work more than:

• 38 hours for a full-time employee (or the hours in their award or agreement if different); or
• for any other employee, the lesser of 38 hours and their ordinary weekly hours

— unless the additional hours are reasonable. Authorised paid or unpaid leave counts towards the hours worked, so an employee who takes a day of sick leave hasn't "saved" 7.6 hours for overtime that week.

The employee may refuse hours that are unreasonable. The Act, and clauses in awards like the Retail Award's clause 21.1, list what must be taken into account:

• any risk to the employee's health and safety;
• the employee's personal circumstances, including family responsibilities;
• the needs of the workplace;
• whether the employee is paid overtime, penalty rates or other compensation, or a salary that reflects an expectation of extra hours;
• any notice the employer gave of the extra hours, and any notice the employee gave of refusing them;
• the usual patterns of work in the industry;
• the nature of the role and the employee's level of responsibility;
• whether the hours fit an averaging arrangement; and
• any other relevant matter.

No single factor decides it. A store manager on a salary well above the award, told a week ahead about a stocktake, can reasonably be expected to stay late. A junior casual asked at 4.50 pm to work until 10 pm when they have to collect a child from daycare probably can't. Fatigue is the factor safety regulators focus on most, and the FWO reminds employers to manage it.

Is the extra time overtime?

Step 1

Outside the span of ordinary hours?

Step 2

Beyond the daily or weekly ordinary hours?

Step 3

Beyond a part-timer's agreed hours?

Step 4

Any yes = overtime rate

check the award's table

Step 5

Over 38 a week?

must also be reasonable

Averaging hours

An award or agreement can allow hours to be averaged over more than a week — for instance 152 hours over four weeks — so a 45-hour week can be balanced by a 31-hour week without overtime. The FWO's example of an employee who works 21, 60, 38 and 33 hours over four weeks shows that averaging doesn't remove the reasonableness test: 60 hours in one week still has to be reasonable. For award and agreement-free employees, the employer and employee can agree in writing to average hours over up to 26 weeks.

Award-free employees

The FWO's maximum weekly hours fact sheet points out something many people don't know: under the Fair Work Act, award and agreement-free employees aren't entitled to a higher rate of pay for overtime. Their protection is the 38-hour cap with reasonable additional hours, their contract, and the National Minimum Wage of A$26.44 an hour for every hour worked. That's why the reasonableness of extra hours often turns on whether their salary reflects them.

When award overtime starts

Each award sets its own triggers, and they're often different for full-time, part-time and casual staff. The General Retail Industry Award's Table 10 is a good illustration:

• Full-time employees get overtime for hours beyond their ordinary hours, outside the span of ordinary hours, or outside the award's rostering rules.
• Part-time employees get overtime for hours beyond their guaranteed hours as agreed (or varied in writing) and for hours outside the span.
• Casual employees get overtime for hours beyond 38 ordinary hours a week (or averaged over a roster cycle), outside the span, or beyond 11 hours on one day and 9 hours on any other day of the week.

The Retail Award also says overtime is calculated daily. Each day's overtime is worked out on its own, so the "first 3 hours at 150%" restarts each day. The Hospitality Award (clause 28.3) has the same rule, and the Clerks Award applies its rates daily as well.

The Hospitality Industry (General) Award pays full-time employees overtime for any time beyond their ordinary hours, and pays full-time and part-time employees overtime with a 4-hour minimum if they're called in on a rostered day off. The Clerks Award pays overtime for hours beyond ordinary weekly hours, beyond 10 ordinary hours in a day, outside the spread, on an unsubstituted rostered day off, or beyond a part-timer's agreed hours — once total overtime in the week reaches half an hour.

Overtime rates in the three biggest awards

Percentages are of the employee's minimum hourly rate. In the Retail and Clerks awards the casual column already includes the 25% casual loading, so don't add it again. The Hospitality Award pays casuals at its clause 28.4 overtime rates for time beyond their maximum hours (clause 11.4) — use the award's pay guide for the casual dollar figures — and its rostered day off rate is 200%. Rates change only when the award is varied; the dollar amounts change every 1 July with the Annual Wage Review, so use the FWO's current pay guide for the hourly figures.

Some awards add minimum payments and rest breaks. Under the Clerks Award, an employee recalled to work after finishing for the day gets at least 3 hours at overtime rates, and employees who work overtime should have 10 consecutive hours off before their next shift. If the employer directs them back without that break, they're paid 200% until released, with no loss of pay for ordinary hours missed.

Time off instead of overtime pay (TOIL)

The FWO notes that some awards and agreements let employees take paid time off instead of being paid for overtime — often called time in lieu, time off in lieu or TOIL. It's always optional for the employee, and the details differ between awards.

Two points are easy to miss. First, under the Hospitality and Clerks awards the time off is hour for hour, which means the employee gives up the overtime premium in exchange for flexibility — that's why the agreement must be genuinely voluntary and must state that the employee can ask to be paid at the overtime rate at any time. Second, every award prohibits undue influence or pressure on an employee to agree to TOIL, and the Clerks Award requires the employer to keep a copy of each agreement as an employee record. A blanket policy that "all overtime is taken as time in lieu" doesn't comply with any of these awards.

Meal allowances, salaries and the right to disconnect

Overtime meal allowances. Most awards pay a meal allowance when overtime is unexpected. Under the Retail Award it's A$24.56 when an employee works more than an hour of overtime after their usual finish without 24 hours' notice, with a further A$22.27 after 4 hours. The Hospitality Award pays A$17.42 for more than 2 hours of overtime without notice the previous day, and the Clerks Award A$20.75 for more than 1.5 hours. The employer can supply a meal instead. Award overtime meal allowances up to the ATO's reasonable amount aren't subject to PAYG withholding. Our employee allowances guide covers the tax treatment.

Overtime meal allowances from 1 July 2026

Award	When it's payable	Amount
General Retail	More than 1 hour's overtime after usual finish, under 24 hours' notice	A$24.56 (+ A$22.27 after 4 hours)
Hospitality	More than 2 hours' overtime, not told the day before	A$17.42
Clerks	More than 1.5 hours' overtime, under 24 hours' notice	A$20.75 (+ A$16.62 after 4 hours)

General Retail

When it's payable

More than 1 hour's overtime after usual finish, under 24 hours' notice

Amount

A$24.56 (+ A$22.27 after 4 hours)

Hospitality

When it's payable

More than 2 hours' overtime, not told the day before

Amount

A$17.42

Clerks

When it's payable

More than 1.5 hours' overtime, under 24 hours' notice

Amount

A$20.75 (+ A$16.62 after 4 hours)

Salaried employees. Paying a salary doesn't remove award overtime. If an award covers the employee, the salary must be at least what they'd have earned under the award for the hours actually worked, including overtime. Many awards contain an annualised wage clause requiring records of start and finish times and periodic reconciliation. A manager who is genuinely award-free and well paid is different: the reasonableness test applies, but there's no overtime rate.

Right to disconnect. Since 26 August 2025 for small businesses (a year earlier for larger ones), employees can refuse to monitor, read or respond to contact outside working hours unless the refusal is unreasonable. Whether the employee is paid for being available — through an on-call allowance or a salary that reflects it — is one of the factors.

Overtime, super, tax and payslips

Super. Overtime payments generally aren't ordinary time earnings, so the 12% super guarantee isn't payable on them under Payday Super's qualifying earnings test. That's also why an all-purpose allowance built into an overtime payment can be reported as part of overtime rather than separately in Single Touch Payroll. Additional hours a part-timer agrees to work at ordinary rates, where the award treats them as ordinary hours, are ordinary time earnings and do attract super. See our Payday Super guide.

Tax. Overtime is taxed as ordinary income. PAYG withholding uses the normal tax tables on the total pay for the period, which is why a big overtime week can seem heavily taxed — the annual outcome evens out when the employee lodges their return.

Payslips and records. Payslips must show overtime hours and rates separately, and employers must keep records of hours worked for 7 years. Where an employer hasn't kept the required time records, the Fair Work Act reverses the burden of proof in an underpayment claim. See our payslip requirements guide and employee records guide.

Worked examples in A$

All examples use adult minimum rates from 1 July 2026, with hourly overtime rates rounded to the cent as in the FWO pay guides.

1. Retail full-timer staying back. Ana is a full-time Retail Employee Level 1 on A$27.81. On Thursday she works 4 hours past her rostered finish. The first 3 hours are at 150% (A$41.72 an hour): 3 × A$41.72 = A$125.16. The fourth hour is at 200% (A$55.62): A$55.62. Total overtime A$180.78. She wasn't told the day before, so she also gets the A$24.56 meal allowance.

2. Hospitality cook on a double. Leo, a full-time Hospitality Level 1 cook on A$26.44, works 3 hours of overtime on a Tuesday: 2 × A$26.44 × 1.5 = A$79.32, plus 1 × A$26.44 × 2 = A$52.88 — A$132.20. Had he been called in on his rostered day off for 2 hours, he'd be paid a minimum of 4 hours at 200%: A$211.52.

3. Casual clerk. Zoe is a casual Clerks Level 1, Year 1 employee (A$26.97). She works 2 hours beyond her 10-hour maximum on Monday. The casual overtime rate of 175% includes the loading: 2 × A$26.97 × 1.75 = A$94.40.

4. Sunday stocktake in the office. A full-time clerk is directed to come in for 2 hours on Sunday to finish a stocktake. Sunday overtime is 200% with a 4-hour minimum: 4 × A$26.97 × 2 = A$215.76.

5. TOIL in retail versus hospitality. A retail employee and a hospitality employee each work 2 overtime hours on a weekday and agree to take time off instead. The retail employee is entitled to 3 hours off (equal to 2 hours at 150%); the hospitality employee to 2 hours. If neither takes the time within 6 months, each is paid the 2 hours at 150%.

Cost of 4 hours' weekday overtime — adult Level 1 (2026)

Award	First block	Remaining hours	Total
Retail (full-time)	3 hrs × A$41.72	1 hr × A$55.62	A$180.78
Hospitality (full-time)	2 hrs × A$39.66	2 hrs × A$52.88	A$185.08
Clerks (full-time)	2 hrs × A$40.46	2 hrs × A$53.94	A$188.80
Clerks (casual)	2 hrs × A$47.20	2 hrs × A$60.68	A$215.76

Retail (full-time)

First block

3 hrs × A$41.72

Remaining hours

1 hr × A$55.62

Total

A$180.78

Hospitality (full-time)

First block

2 hrs × A$39.66

Remaining hours

2 hrs × A$52.88

Total

A$185.08

Clerks (full-time)

First block

2 hrs × A$40.46

Remaining hours

2 hrs × A$53.94

Total

A$188.80

Clerks (casual)

First block

2 hrs × A$47.20

Remaining hours

2 hrs × A$60.68

Total

A$215.76

Common overtime mistakes

• Only paying overtime after 38 hours. Daily limits, spreads of hours and part-timers' agreed hours all trigger overtime earlier.
• Averaging overtime across the week. Most awards calculate overtime day by day.
• Adding the casual loading twice. Retail and Clerks casual overtime rates already include it.
• Unpaid "staying back". Time spent closing, counting tills or finishing work at the employer's direction is work.
• Compulsory TOIL. Time off instead of overtime must be agreed in writing by the employee, and under most awards it's hour for hour, not a discount on what's owed.
• Letting TOIL balances pile up. Untaken time must be paid at the overtime rate after 6 months and on termination.
• Salaries that don't cover the hours. Reconcile salaried award-covered employees against what the award would have paid.
• Paying super on overtime by mistake — or, more often, failing to pay it on part-timers' additional ordinary hours.

Official links

• Maximum weekly hours fact sheetFair Work Ombudsman — s 62 and reasonable hours
• When overtime appliesFWO — triggers by award
• Overtime pay and TOILFWO — time off instead of overtime
• Pay and Conditions ToolFWO — calculate overtime under your award
• General Retail Industry Award 2020Clause 21 — overtime
• Hospitality Industry (General) Award 2020Clause 28 — overtime
• Clerks—Private Sector Award 2020Clauses 21–23 — overtime and TOIL

What to do next

Check the overtime clause of each award you apply, note the daily triggers and the span of hours, and make sure your rostering or time-and-attendance system flags them automatically. If you offer time off instead of overtime, use the award's written agreement and track balances so nothing is left unpaid after 6 months. For the allowances that often come with overtime, read our employee allowances guide, and for base rates and penalties see our award wages guide.

This is general information, not legal or tax advice — confirm on the official source or with a professional.

Frequently asked questions

What is the overtime rate in Australia?

There's no single national rate — it comes from the employee's award or agreement. Most awards pay 150% (time and a half) for the first two or three hours of weekday overtime and 200% (double time) after that. The General Retail Award pays 150% for the first 3 hours Monday to Saturday, 200% after that and on Sundays, and 250% on public holidays.

How many hours can you work before overtime in Australia?

The NES caps a full-time employee's week at 38 hours plus reasonable additional hours. Awards decide when overtime rates start, which can be daily as well as weekly — for example hours beyond the daily maximum, outside the span of ordinary hours, or beyond a part-timer's agreed hours. Some awards average the 38 hours over a roster cycle.

Can I refuse to work overtime?

You can refuse additional hours that are unreasonable. Whether they're reasonable depends on factors in section 62 of the Fair Work Act, including health and safety risks, your family responsibilities, the needs of the business, whether you're paid overtime or a salary that reflects extra hours, how much notice you got, and your role. You can't refuse hours that are reasonable.

Can I take time off instead of being paid overtime?

Yes, if your award or agreement allows it and you agree in writing. Under the Hospitality and Clerks awards you get the same number of hours off as overtime worked; under the Retail Award you get time off equal to the overtime payment, so 2 hours at 150% becomes 3 hours off. The time must be taken within 6 months or paid at the overtime rate.

Do part-time employees get overtime?

Usually, yes. Most awards pay part-time employees overtime for hours beyond the hours they've agreed to work or outside the span of ordinary hours, even if their total is under 38 a week. Some awards let part-timers agree in writing to work extra hours at ordinary rates, so check the part-time clause of the relevant award.

Is super paid on overtime?

Generally no. Overtime payments aren't ordinary time earnings, so the 12% super guarantee doesn't apply to them. The exception is hours that are really ordinary hours under the award, such as additional rostered hours a part-timer works at ordinary rates. Your employer can choose to pay more super, and some agreements require it.

Sources & verification

Figures on this page were checked against the sources below when it was last reviewed on 13 October 2026. Each rate and limit is stored once with its own official source and review date, and official update channels are monitored daily so changes are picked up. How we verify

1. 1.Maximum weekly hours fact sheet — Fair Work Ombudsman · accessed 13 October 2026
2. 2.When overtime applies — Fair Work Ombudsman · accessed 13 October 2026
3. 3.Overtime pay — Fair Work Ombudsman · accessed 13 October 2026
4. 4.Hours of work — Fair Work Ombudsman · accessed 13 October 2026
5. 5.General Retail Industry Award 2020 [MA000004] — consolidated to 1 July 2026 — Fair Work Commission · accessed 13 October 2026
6. 6.Hospitality Industry (General) Award 2020 [MA000009] — consolidated to 1 July 2026 — Fair Work Commission · accessed 13 October 2026
7. 7.Clerks—Private Sector Award 2020 [MA000002] — consolidated to 1 July 2026 — Fair Work Commission · accessed 13 October 2026
8. 8.Withholding for allowances (Table 1a and overtime meal allowances) — Australian Taxation Office · accessed 13 October 2026