We present the results from 10 nights of observations of the globular cluster NGC 6981 (M72) in the V, R and I Johnson wavebands. We employed the technique of difference image analysis to perform precision differential photometry on the time-series images, which enabled us to carry out a census of the understudied variable star population of the cluster. We show that 20 suspected variables in the literature are actually non-variable, and we confirm the variable nature of another 29 variables while refining their ephemerides. We also detect 11 new RR Lyrae variables and three new SX Phe variables, bringing the total confirmed variable star count in NGC 6981 to 43. We performed Fourier decomposition of the light curves for a subset of RR Lyrae stars and used the Fourier parameters to estimate the fundamental physical parameters of the stars using relations available in the literature. Mean values of these physical parameters have allowed us to estimate the physical parameters of the parent cluster. We derive a metallicity of [Fe/H]ZW≈−1.48 ± 0.03 on the Zinn & West scale (or [Fe/H]UVES≈−1.38 ± 0.03 on the new Carretta et al. scale) for NGC 6981, and distances of ∼16.73 ± 0.36 and ∼16.68 ± 0.36 kpc from analysis of the RR0 and RR1 stars separately. We also confirm the Oosterhoff type I classification for the cluster, and show that our colour–magnitude data are consistent with the age of ∼12.75 ± 0.75 Gyr derived by Dotter et al.