SCHADS overtime rates did not change in 2026. Overtime remains time and a half for the first three hours, then double time. However, the trigger changed. The clause now applies per day or per shift, which protects workers crossing midnight. Also, employees can agree in writing to work up to 12 ordinary hours around a sleepover before overtime starts.
Key takeaways
- Overtime means work beyond 38 ordinary hours per week for full-timers and casuals. For part-timers, it means work beyond their agreed contracted hours.
- The clause now refers to overtime per day or per shift. So an employee who works across midnight keeps their entitlement when the date changes.
- With a written agreement, part-time and casual employees can work up to 12 ordinary hours around a sleepover before overtime applies, up from 10.
- The most expensive recurring mistake sits in part-time contracts: stating fixed weekly hours triggers overtime the moment the employee works beyond them.
- Time off in lieu must match the overtime rate. Hour-for-hour TOIL creates a standing underpayment.
What counts as overtime under the SCHADS Award?
For full-time employees, overtime means work beyond 38 ordinary hours per week. For part-timers, it means work beyond their agreed contracted hours, or beyond 38 hours per week or 76 per fortnight if that runs higher. For casuals, it means work beyond 38 hours per week.
The 2026 wording change matters here. The clause now frames overtime per day or per shift. As a result, an employee who works across midnight keeps their entitlement, even though the shift spans two calendar dates. In a sector full of overnight work, that closes a gap which previously produced inconsistent payroll treatment.
What are the SCHADS overtime rates in 2026?
Overtime runs at time and a half for the first three hours, then double time, with separate weekend penalty rates. None of these rates moved on 1 June 2026. If you provide time off in lieu instead of payment, the TOIL must match the overtime rate, not swap hour for hour.
One interaction also matters when rosters attract multiple entitlements. Shift loadings do not stack with overtime. So when a shift attracts both, you pay the higher rate, not the two combined.
How does the new 12-hour sleepover agreement work?
Clause 25.1(c) lets an employer and employee agree in writing to extend the ordinary hours attached to a sleepover. They can agree to 12 hours in total before overtime applies, up from 10. The agreement must sit separately and in writing. Also, employees can decline.
The change acknowledges reality. Decent-length shifts on either side of a sleepover are normal for NDIS and home care providers. Without the extension, the shift-plus-sleepover-plus-shift pattern tipped into overtime almost by default. Consequently, common rosters became uncommercial.
The compliance burden sits in the paperwork. You need a record of who agreed, when, and to which version of the agreement. If you cannot produce that document, you do not have an agreement. Instead, you have an underpayment claim waiting to land. So issue the agreements for digital signature with automatic timestamps, and the evidence collects itself.
What are the 4 most common SCHADS overtime mistakes?
The four recurring mistakes: missing cumulative hours across multiple short shifts, skipping overtime for part-timers who work beyond contracted hours, confusing the span of hours with daily overtime, and treating time off in lieu as hour for hour. Each one quietly accrues underpayments until an audit finds them.
1. Missing cumulative hours across short shifts
Lots of short shifts still add up to 38 hours in a week. However, payroll setups that only check shift length never notice the weekly total. So underpayments accumulate silently.
2. Fixed hours in part-time contracts
This mistake costs the most. If a part-time contract specifies 15 hours per week and the employee works 20, the extra five hours become overtime, every single week. The fix sits in the contract wording. Engage part-timers for up to 37.5 hours per week as rostered from time to time. That preserves rostering flexibility without triggering overtime automatically, even in weeks where the employee only works 15 hours. Reissuing part-time contracts at scale takes real coordination, so run it through workflow automation as a tracked, evidenced campaign rather than a quarter-long slog.
3. Confusing span of hours with daily overtime
The span of ordinary hours and daily overtime work as separate concepts. For example, social and community services employees have a span of 6am to 8pm. Work outside that span attracts penalties, even when weekly hours sit under 38. Both rules can apply at once, so check both.
4. Hour-for-hour time off in lieu
If the employee would have earned time and a half, one hour of TOIL does not equal one hour worked. TOIL must reflect the overtime rate. Otherwise, every hour-for-hour arrangement sits on your books as a standing liability.
How should employers update payroll and contracts for the new rules?
Three actions. First, configure payroll so overtime triggers per day or per shift, and respects the 12-hour threshold where an agreement exists. Second, reword part-time contracts to “up to 37.5 hours as rostered from time to time”. Third, create a template written agreement with a tracked signature process.
Then brief the people who run the system. Payroll, HR, and anyone building rosters all need to know one thing: the overtime trigger now depends partly on documents, not purely on the clock. A compliance dashboard showing which employees hold a current signed agreement closes the loop between rostering decisions and the paperwork that authorises them.
Related reading: SCHADS Award Changes June 2026: What NDIS Providers Need to Do Now puts the overtime changes in the context of the full determination.
Frequently asked questions
What is the overtime rate under the SCHADS Award?
Overtime runs at time and a half for the first three hours, then double time, with separate weekend penalty rates. The 1 June 2026 determination left these rates unchanged. Also note that shift loadings do not stack with overtime; the higher rate applies.
When does overtime apply to part-time SCHADS employees?
When they work beyond their agreed contracted hours, or beyond 38 hours per week or 76 per fortnight if that runs higher. Contracts that state a fixed weekly figure trigger overtime as soon as the employee exceeds it. So use “up to 37.5 hours as rostered” wording instead.
Can SCHADS employees work 12 hours without overtime?
Only around a sleepover, and only by agreement. Clause 25.1(c) lets the parties agree in writing to extend ordinary hours attached to a sleepover to 12 in total before overtime applies. However, the employee can decline, and the agreement must sit separately in writing.
How does time off in lieu work under SCHADS?
Time off in lieu must match the overtime rate the employee would have earned. So if the work would have attracted time and a half, the TOIL must reflect that. Hour-for-hour TOIL arrangements remain a common source of underpayment claims.
Did the SCHADS overtime threshold change in 2026?
Yes, in one situation. The ordinary hours an employee can work around a sleepover before overtime moved from 10 to 12, but only through a separate written agreement. General weekly overtime thresholds did not change.
About the author
Graham Martin is the co-founder of Worknice, an Australian HRIS for NDIS and community services providers. The platform automates onboarding, document acknowledgements, and compliance tracking. This article draws on a June 2026 webinar Graham co-presented with Isabella Turner, workplace lawyer at Chamberlains. It is general information, not legal advice.
Sources
- Fair Work Commission. “Social, Community, Home Care and Disability Services Industry Award 2010 (MA000100).” https://library.fairwork.gov.au/award/?krn=MA000100
- Fair Work Ombudsman. “Overtime pay.” https://www.fairwork.gov.au
- Turner, I. and Martin, G. “Getting SCHADS Right in 2026.” Chamberlains Law Firm and Worknice webinar, June 2026.
