Do Salaried Employees Get Overtime in Australia?

Start with the principle. Being paid an annual salary is a method of payment — it does not remove the entitlements underneath it. Many salaried employees remain award-covered, because award coverage depends on your employer's industry and your classification, not on whether you are paid weekly, hourly or as a lump annual figure. If an award covers your job, its minimum rates, overtime rates and penalty rates remain the benchmark your salary must satisfy.

So the real question is never "am I salaried?" but "does my salary actually cover everything my award requires for the hours I work?"

Employers use two main mechanisms to fold overtime into a salary.

The first is an annualised salary arrangement. Some awards contain their own annualised-salary clauses, which allow an employer to pay a fixed annual amount in satisfaction of specified award entitlements — but these clauses are award-specific, with their own conditions (often including reconciliation and record-keeping requirements). Whether one applies, and what it must cover, depends on your particular award.

The second is a contractual set-off clause — a term saying your salary is paid in satisfaction of award entitlements including overtime. A set-off clause can be effective, but only to the extent your salary genuinely covers those entitlements. If the overtime you actually worked exceeds what the salary absorbs, the set-off does not save the shortfall.

For enterprise agreements there is a further gate: an agreement must pass the Better Off Overall Test before it is approved, meaning covered employees must be better off overall than under the relevant award. The common thread across all three is the same idea — you must end up better off, not worse.

Whatever your salary, one thing does not bend: the National Employment Standards. The maximum weekly hours standard — 38 hours plus only reasonable additional hours (art. 62) — applies to you regardless of how you are paid. A salary does not license unlimited hours, and it does not displace the NES, which "cannot be displaced" even by an enterprise agreement (art. 61).

Being salaried can be relevant to whether extra hours are reasonable — art. 62(3)(d) treats "a level of remuneration that reflects an expectation of … working additional hours" as one factor — but it is only one factor among ten, and it goes to reasonableness, not to whether you are paid at all.

Here is the situation that produces a claim. You are on a salary set with, say, a 38-hour week in mind. Over months you work well beyond that. Your award (or a set-off clause) was meant to cover overtime — but when you actually compare the salary against the award value of every hour worked, the salary falls short.

In that case, the underpayment stands. At a minimum you are owed the value of the unpaid hours at your ordinary hourly rate — a certain 1:1 floor — with an award overtime premium likely on top once the award is confirmed. And there is a hard floor beneath everything: from 1 July 2026 the National Minimum Wage is $26.44 per hour ([2026] FWCFB 3500). No salary arrangement can result in an effective hourly rate below that once your true hours are counted.

Salaried workers are often told "we don't track your hours, you're on a salary" — but that does not remove the employer's record-keeping duties. Employee records must be made and kept for seven years (art. 535) and pay slips given within one working day of payment (art. 536); where a penalty rate or loading is payable for overtime, daily overtime hours must be recorded (Fair Work Regulations reg 3.34). If your employer failed to keep those records and you dispute what you are owed, the burden shifts: the employer must disprove your allegation (art. 557C). And you can look back 6 years (art. 544). So keeping your own contemporaneous record of hours is doubly valuable when you are salaried and your employer keeps none.