Why Overtime Seems Taxed More in Australia (It Is Usually Withholding)

Published March 2026 Last updated March 2026

Last reviewed:

Primary tax-year context: Current Australian tax settings

This article is general information only. We maintain pages using primary-source checks and date-based reviews. See editorial policy.

OvertimePAYGIncome Tax

General information only.

Overtime does not have a special permanent tax rate. What you see on a payslip is PAYG withholding for that pay cycle.

Why the payslip impact is larger

  • Payroll annualises or scales period earnings for withholding tables
  • One high-pay cycle can trigger more withholding in that period
  • Final tax is reconciled at year end based on your full-year taxable income

If total withholding is too high across the year, you may receive a refund on lodgment.

Source

Where to go next

Understand the rules

Policy updates hub Track key tax dates and rule changes.

Compare alternatives

Tax scenario library Compare outcomes before locking a tax decision.

Run the numbers

PAYG Calculator Run calculator estimates using this article context. Income Tax Calculator Run calculator estimates using this article context. Tax Return Calculator Run calculator estimates using this article context.