Salaried employees often assume overtime does not apply to them. That is not always correct. A salary can include compensation for reasonable extra hours, but award coverage, contract wording and the actual hours worked still matter.
This guide gives a practical way to check whether the salary is likely to cover the hours, then points you back to the overtime calculator for a rough comparison.
How to compare salary and overtime
Break the salary into an approximate hourly value over the actual hours worked. Then compare that value with what the employee would have received under the award for ordinary hours, overtime, penalty rates and allowances. If the salary leaves the employee worse off, there may be a problem.
This is sometimes called an annualised salary or set-off issue. The wording of the contract is important, but the practical dollars also matter.
Warning signs
- The employee regularly works long extra hours with no time off or loading.
- The contract does not clearly say what the salary is intended to cover.
- The employee is award-covered but no comparison is being made.
- Payslips do not show enough information to check the arrangement.
Salary overtime questions can become legal and fact-specific quickly. Use calculators for a first-pass estimate, then check the award, contract and Fair Work guidance for the exact position.
Related calculators and guides
Common questions
Do salaried employees get overtime in Australia?
They can. A salary may cover overtime only if the contract and overall pay arrangement properly account for the relevant entitlements.
Can a salary include reasonable overtime?
Yes, but what is reasonable depends on the role, contract, pay level and actual hours worked.
How do I check if my salary covers overtime?
Compare the salary with the award amount that would be payable for the same ordinary hours, overtime, penalties and allowances.
Worked example using this guide
Example: $78,000 salary compared with regular 45 hour weeks. The estimate is Divide the salary by the actual hours worked, then compare that hourly value with award ordinary, overtime and penalty entitlements. Use this as a gross-pay sense check, then compare it with the exact award, agreement or payroll rate that applies to the job.
If the shift includes more than one pay type, split it into separate lines before calculating. Ordinary hours, overtime, Sunday work and public holiday work can all use different multipliers. This is also why a payslip with a single blended hourly amount is harder to audit than a payslip that separates hours and rates.
For the fastest cross-check, open the overtime calculator, Sunday rates calculator, public holiday pay calculator or time and a half calculator in another tab and enter the same base rate and hours.