Overtime & Penalty Rate Calculator 2025-26

How Is Overtime Pay Calculated in Australia?

Overtime pay in Australia is calculated by multiplying your base hourly rate by the penalty multiplier set in your Modern Award or enterprise agreement, then multiplying by the number of overtime hours worked. The formula is: Base Rate x Penalty Multiplier x Overtime Hours = Gross Overtime Pay.

Full-time employees on a standard 38-hour week trigger overtime after exceeding 38 ordinary hours per week or 7.6 hours per day. Part-time employees trigger overtime after exceeding their agreed contracted hours. The Australian tax calculator applies the same income tax brackets to overtime earnings as it does to regular salary, meaning your take-home pay from overtime depends on your marginal rate.

Worked Example: Overtime at $35/hr

A warehouse worker earns a base rate of $35.00/hr. They work 6 overtime hours on a weekday at time-and-a-half (1.5x), and their taxable income places them in the 30% marginal tax bracket.

1. Penalty rate: $35.00 x 1.5 = $52.50/hr
2. Gross overtime: $52.50 x 6 hours = $315.00
3. Estimated tax (30% + 2% Medicare levy): $315.00 x 0.32 = $100.80
4. Net overtime pay: $315.00 - $100.80 = $214.20

Use our Take-Home Pay Calculator to see how overtime earnings affect your total weekly, fortnightly, or annual after-tax income.

What Are the Overtime Penalty Rates?

Overtime penalty rates range from 1.5x to 2.5x the base hourly rate, depending on the day, time, and applicable Modern Award. The Fair Work Ombudsman sets minimum penalty rates across 122 modern awards covering industries including retail, hospitality, healthcare, manufacturing, and construction.

Exact multipliers vary by Award. Use the Fair Work PACT tool to check your specific award penalties.

Penalty Rates by Award Type

Different Modern Awards set different penalty structures. The table below compares weekday overtime rates across 5 common awards for the FY2025-26 financial year.

Who Uses This Calculator?

This Australian overtime pay calculator serves employees, employers, and payroll professionals who calculate penalty rate earnings for FY2025-26. Common use cases include:

• Shift workers in retail, hospitality, and healthcare verifying their weekend and public holiday pay on each payslip
• Full-time employees estimating the net value of extra hours before agreeing to overtime requests
• Part-time workers checking whether hours above their contracted agreement trigger overtime multipliers
• Small business owners budgeting weekly labour costs when rostering staff across weekends and public holidays
• Payroll managers cross-checking PAYG withholding on overtime payments against ATO tax tables

Employees earning overtime frequently benefit from reviewing their total annual income using the Income Tax Calculator to confirm the correct marginal rate applies to their overtime earnings.

Overtime Pay Table by Hourly Rate

The table below shows gross overtime pay for 8 hours of overtime at common base hourly rates across 3 penalty multipliers. These figures represent gross pay before income tax and the 2% Medicare levy.

The national minimum wage is $24.10/hr for FY2025-26. Rates above reflect common award classifications. Use our Hourly to Annual Salary Calculator to convert your hourly rate to an annual salary.

How Is Overtime Taxed?

Overtime earnings are taxed at your marginal tax rate because they are added on top of your regular assessable income. Every overtime dollar sits in your highest income tax bracket, identical to how bonus payments are taxed.

Your employer withholds tax from overtime pay through PAYG withholding. The ATO provides Schedule 5 (tax table for back payments and lump sums) and the standard weekly/fortnightly tax tables to calculate withholding on pay periods that include overtime. The 2% Medicare levy surcharge also applies to overtime earnings, and employees without private health insurance earning above $93,000 per year pay an additional "Medicare Levy Surcharge" of 1% to 1.5%.

FY2025-26 Tax Brackets on Overtime Income

The income tax brackets below determine the marginal rate applied to your overtime. An employee earning $75,000 in base salary pays 30% plus 2% Medicare levy on every overtime dollar, reducing each $1.00 of gross overtime to $0.68 in take-home pay.

Do I Get Super on Overtime?

Overtime is generally not classified as Ordinary Time Earnings (OTE) and does not attract the 12% Superannuation Guarantee for FY2025-26. The ATO defines OTE as the earnings an employee receives for ordinary hours of work, and overtime hours fall outside that definition.

Some enterprise agreements or employment contracts include overtime in the superannuation calculation base. Check your employment agreement or contact your employer's payroll team to confirm. Use our Superannuation Calculator to calculate the SG rate on your ordinary earnings separately.

What Are Common Overtime Pay Mistakes?

Underpayment of overtime is one of the most common payroll compliance issues in Australia, with the Fair Work Ombudsman recovering over $500 million in unpaid wages across the 2022-23 and 2023-24 financial years. These 5 mistakes occur most frequently:

1. Applying the wrong multiplier — Using 1.5x for all overtime hours instead of escalating to 2.0x after the first 2 or 3 hours as required by most awards
2. Calculating casual overtime on the loaded rate — The overtime multiplier applies to the base rate only, not the base rate plus the 25% casual loading
3. Ignoring part-time overtime triggers — Part-time employees earn overtime after exceeding their agreed hours, not after 38 hours per week
4. Missing public holiday penalties — Australia has 8 national public holidays and additional state-specific holidays, each attracting 2.0x to 2.5x penalty rates
5. Using the wrong tax bracket — Overtime sits on top of your base salary, so the marginal rate on overtime is typically higher than your average tax rate across all income

Employees who suspect underpayment of overtime should compare their payslip against the calculations from this overtime pay calculator and review their applicable award on the Fair Work Ombudsman website.

Related Calculators

Overtime pay interacts with income tax, superannuation, and total salary packaging. These calculators help you model the complete picture:

• Weekly Pay Calculator — Convert your base salary plus overtime into a weekly after-tax amount
• Income Tax Calculator — Calculate your total income tax liability including overtime in your assessable income for FY2025-26
• Take-Home Pay Calculator — See your net pay after tax, Medicare levy, and HECS-HELP on a salary that includes regular overtime
• Bonus Tax Calculator — Estimate tax on lump-sum payments, which follow the same marginal rate logic as overtime
• Superannuation Calculator — Calculate the 12% SG contribution on your ordinary time earnings, separate from overtime

Frequently Asked Questions