Understanding Your Payslip:
Hours, Overtime, Penalty Rates & Casual Loading

​When working in Australia, understanding how your payslip is calculated is essential. Whether you're working full-time, part-time, or casual employment, knowing the rules behind ordinary hours, overtime, penalty rates, and casual loading helps you verify you're being paid correctly—and provides crucial documentation for your records.

What Is a Payslip and Why Does It Matter?

A payslip is a legally required document that your employer must provide to you within one working day of payment. It details exactly how much you've been paid, what deductions have been made, your hourly rates, hours worked, and any additional payments like overtime or penalty rates.

Under the Fair Work Act 2009, payslips are not optional. They're a critical record for:

• Verifying your income and employment details

• Tracking leave entitlements

• Confirming superannuation contributions

• Providing evidence for visa applications and other official purposes

• Resolving pay disputes

Standard Full-Time Hours: 38 Hours Per Week

In Australia, full-time work is defined as 38 hours per week under the National Employment Standards. This is the legal benchmark applied across most Australian workplaces, regardless of the state or industry.

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Key Points About the 38-Hour Week

Spread of hours: The 38 hours can be spread across different numbers of days. For example:

• 5 days of 7.6 hours each = 38 hours (standard)

• 4 days of 9.5 hours each = 38 hours (also considered full-time)

• 4 days of 7.5 hours each = 30 hours (usually part-time, not full-time)

Averaging: Your 38 hours can be averaged over a period of up to four weeks. This means some weeks you might work slightly more or less than 38 hours, but the average should not exceed 38 hours over the averaging period (unless additional hours are "reasonable").

Reasonable additional hours: Your employer can ask you to work more than 38 hours if those additional hours are "reasonable." What's considered reasonable depends on:

• The nature of your job

• Industry standards and award requirements

• Any agreement you've made with your employer

• Whether compensation is provided

If your award or enterprise agreement specifies different full-time hours (some professional awards specify 40 hours, for example), those hours take precedence over the standard 38 hours.

Ordinary Hours vs. Additional Hours on Your Payslip

Your payslip must clearly separate ordinary hours from additional hours (overtime). This distinction is critical because additional hours are often paid at different rates.

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How Ordinary Hours Appear on Your Payslip

For hourly employees:

• Ordinary Hourly Rate: The base rate per hour (e.g., $28.50/hour)

• Hours Worked at Ordinary Rate: The number of hours paid at this rate

• Amount Paid: Hourly rate × Hours worked

Example: If you work 38 hours at $28.50/hour, the ordinary pay would be:

38 hours × $28.50 = $1,083.00

For salaried employees:

• Your annual or weekly salary is listed (e.g., $70,000 per year)

• No hourly rate is typically shown

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Distinguishing Ordinary from Additional Hours

If you work more than 38 hours in a week (or more than your agreed ordinary hours), the additional hours should be clearly itemized on your payslip separately from ordinary hours. These additional hours are typically paid at higher rates—either as overtime or under different conditions.

Overtime Rates: How Extra Hours Are Paid

When you work additional hours beyond your ordinary hours, those hours are paid at overtime rates, which are higher than your base rate.

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Common Overtime Penalty Rates

Overtime rates vary depending on when you work the additional hours and your employment type. Standard overtime rates include:

• Ordinary hours (Mon-Fri, standard time): 100% of base rate

• Overtime hours (general): 150% of base rate (time and a half)

• Saturday overtime: 200% of base rate (double time)

• Sunday overtime: 200% to 250% of base rate, depending on the time of day and award

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Your Payslip Must Show Overtime Separately

On your payslip, overtime should be listed as a separate line item, showing:

• The overtime hourly rate (e.g., $42.75/hour for time and a half at $28.50 base)

• The number of overtime hours worked

• The total amount paid for those hours

Example: If you worked 5 hours of overtime at time and a half on a weekday:

5 hours × $42.75 (150% of $28.50) = $213.75

The 7:00 PM Penalty Rate: Evening and Night Shift Penalty

One of the most important penalty rates to understand is the 7:00 PM threshold for evening and night shift work. Many awards and enterprise agreements apply special rates when you work past 7:00 PM.

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How the 7:00 PM Penalty Works

If your agreement specifies a penalty rate for work after 7:00 PM (commonly 115% to 125% of base rate), you receive this premium for each hour worked after 7:00 PM.

Important: The rate applies only to hours after 7:00 PM, not to your entire shift. If your shift spans across the 7:00 PM boundary, your payslip will show:

• Hours before 7:00 PM: Paid at the ordinary or standard rate for that time

• Hours from 7:00 PM onward: Paid at the evening/night penalty rate

Example: Understanding the 7:00 PM Calculation

Suppose you work 4:00 PM to 9:00 PM, earning $28.50/hour base rate, with a 115% penalty rate for hours after 7:00 PM.

• 4:00 PM to 7:00 PM (3 hours): 3 × $28.50 = $85.50 (ordinary rate)

• 7:00 PM to 9:00 PM (2 hours): 2 × $32.78 (115% of $28.50) = $65.56

Total for the shift: $85.50 + $65.56 = $151.06

How It Appears on Your Payslip

Your payslip should clearly show:

• Ordinary hours (4:00 PM to 7:00 PM): 3 hours @ $28.50 = $85.50

• Evening penalty hours (7:00 PM to 9:00 PM): 2 hours @ $32.78 = $65.56

• Total: $151.06

Casual Loading: The 25% extra for Casual Workers

If you're employed as a casual, you receive a casual loading of 25% on top of your base hourly rate. This loading compensates for the lack of paid leave, job security, and other permanent employee benefits.

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How Casual Loading Works

Casual loading is not optional—it's a legal entitlement mandated by the Fair Work Act 2009 and relevant awards. Every casual employee must receive it.

Standard casual loading: 25% of the base hourly rate

Calculation steps:

1. Identify the base hourly rate for a full-time employee in your role

2. Multiply that rate by 25% to get the loading amount

3. Add the loading to the base rate to get your total casual hourly rate

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Casual Loading Calculation Example

Suppose the base hourly rate for your role is $24.10 per hour:

• Base hourly rate: $24.10

• Casual loading (25%): $24.10 × 0.25 = $6.03

• Total casual hourly rate: $24.10 + $6.03 = $30.13 per hour

If you work 30 hours in a week as a casual:

30 hours × $30.13 = $903.90

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Casual Loading on Your Payslip

Your payslip must show casual loading separately. You should see:

• Ordinary hourly rate: $24.10

• Casual loading amount: $6.03

• Total hourly rate: $30.13

• Hours worked: 30

• Total payment: $903.90

Some employers may show this as a percentage (e.g., "Casual loading @ 25%") rather than listing the loading and rate separately, but the key is that it must be clearly identified so you can verify you're being paid correctly.

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Important: Casual Loading and Overtime

If you're a casual and you work overtime, the overtime rate is calculated on your loaded rate (not the base rate).

Example: If your casual loading is included, and you work 5 hours of overtime at time and a half:

5 hours × ($30.13 × 1.5) = 5 hours × $45.195 = $225.98

This must be shown separately on your payslip as "Overtime – Casual Loading Included."

What Must Appear on Your Payslip: Mandatory Details

Australian payslips must include specific information by law. Here's what should appear:

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Employee and Employer Information

• Employee's full name

• Employee's address (may be optional)

• Employer's name and Australian Business Number (ABN)

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Payment Details

• Date of payment

• Pay period covered

• Gross amount paid

• Net amount paid (after deductions)

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Hours and Rate Information

For hourly/casual employees:

• The ordinary hourly rate of pay

• The number of hours worked at that rate

• Any additional rates (overtime, penalty rates, shift allowances)

• Hours worked at each separate rate

For salaried employees:

• Annual salary or fortnightly/weekly salary rate

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Deductions

• Income tax withheld

• Superannuation contributions (amount and fund name/number)

• Any other deductions (HELP/HECS debt, salary sacrifice, union fees, etc.)

• Each deduction must be itemized and clearly described

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Leave Information (if applicable)

• Annual leave balance

• Personal/sick leave balance

• Any leave loading paid