Overtime pay

Overtime is work performed outside the ordinary hours listed in an award or agreement. Overtime is usually paid at a higher rate.

When overtime applies

The details about when overtime applies are different under each award and registered agreement. To find out when overtime applies in your industry see When overtime applies.

To calculate overtime rates use our Pay and Conditions Tool

You can also find information about pay under your relevant award by visiting our Pay guides page.

Time off instead of overtime pay

Some awards and registered agreements allow an employee to take paid time off instead of being paid overtime pay. This is also known as 'time in lieu', 'time off in lieu' or 'TOIL'.

Find more information about taking time off instead of overtime pay in your award by selecting from the list below.

Hospitality Award

Based on what you've told us, it looks like you're covered by the Hospitality Industry (General) Award [MA000009]. 

With the written agreement of their employer, an employee can choose to take paid time off instead of being paid for overtime.

An employer can’t force or pressure an employee to take time off instead of being paid for overtime.

Agreeing in writing

For each pay period, employers and employees need to make a separate written agreement for any overtime the employee has worked and wants to take time off for.

An email exchange can count as a written agreement.

Example: Separate agreements

Bob is paid weekly and his pay period goes from Monday – Sunday. Bob works 5 hours of overtime on Tuesday and wants to take paid time off instead of being paid overtime for it. Bob makes an agreement with his employer to take time off for the 5 hours. The next pay period, Bob works 4 hours of overtime on Wednesday and also wants to take it as time off instead of being paid overtime. Bob makes another, separate written agreement with this employer for the 4 hours he wants to take off.

The agreement has to say:

  • how many hours of overtime the employee worked and when they worked them
  • that the employer and employee agree for the employee to take time off instead of being paid overtime
  • that at any point before the time off is taken, the employee may request to be paid the overtime instead and the employer has to pay it in the next pay period.

Employers have to keep this agreement for the employee’s records.

Taking the time off

An employee gets an hour of paid time off for each hour of overtime they’ve worked.

The time off has to be taken within 6 months of working the overtime and at a time (or at more than one time) that the employer and employee agree to.

If the employee doesn’t take the time off within 6 months of working the overtime, their employer has to pay them the overtime that would have applied in their next pay cycle. 

Ending employment

If an employee has accumulated time off instead of being paid overtime and their employment ends before they take it, the employer has to pay them the overtime that would have applied.

Loaded rate arrangements

The Hospitality Award allows an employer to pay a loaded rate to a full-time adult employee classified at Level 3 or above (with some conditions applying).

For eligible full-time employees, the loaded rate replaces:

  • some overtime payments
  • some penalty rates (but not public holiday penalty rates for example)
  • the split shift allowance when the period between shifts is between 2 and 3 hours.

Loaded rate arrangements don’t apply to part-time or casual employees. Employers need to follow certain consultation, record-keeping and dispute resolution rules.

Find out more about loaded rates at Loaded rates added to Hospitality Award.

To find out more about who this award applies to, go to the Hospitality Award summary.

Source reference:  Hospitality Industry (General) Award [MA000009] clause 28.5  external-icon.png

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