Police divers found their car about 11.20am on Thursday after it crashed into a tree and went into the Macdonald River at St Albans, northwest of Sydney, late on Wednesday.
The pair, whose bodies were later found in the water, are yet to be formally identified but are believed to be aged in their 20s and 50s.
A 24-year-old man survived after escaping the car and reaching the riverbank.
"We believe that they're sons and a father," NSW Police Inspector Claudette Gebrael told reporters shortly before the vehicle was recovered on Thursday.
The rain continues as Sydney approaches its wettest August since records began in 1858.
Sydney's Observatory Hill station measured 82mm in the 24 hours to 9am - exceeding the August average in a day - while totals above 50mm were widespread along nearby coastal areas.
SES deputy commissioner Debbie Platz said the agency has conducted five flood rescues and urged people to avoid floodwaters.
"We don't know what's under this water ... how deep it is, how fast it's flowing, so it's incredibly important that everyone stays out," she said.
A man was rescued at Douglas Park, southwest of Sydney, while the agency has received more than 1100 calls for assistance.
It's the state's latest bout with severe weather in recent months.
"Storms and flooding have been constant this year and we know that people are tired," Ms Platz said.
"Some people are becoming complacent - we urge you not to do that."
The SES was grateful for its 11,000 volunteers involved in repeated responses, she said.
"Of course, they do get tired," Ms Platz said.
Rolling emergencies had also driven more people to volunteer, with more than 300 applying to the agency after floods at Taree and surrounding areas in May, Ms Platz said.
The weather bureau said rainfall had been lower than expected over the state but flood threats remained.
"Saturated soils and the rivers already being full are showing that even with moderate rainfall, these rivers are responding," Bureau of Meteorology's hazard preparedness and response manager Steven Bernasconi said.
"It's not taking a lot to move those rivers."
Flood watches were active around the mid-north coast, northwest slopes and Hunter region in NSW, with major flooding possible on the Namoi River at Gunnedah.
Residents north of the river have been advised to prepare to be isolated.
A high-pressure system was lingering in the Tasman Sea while surface troughs onshore were deepening.
"Together, they are combining to create a severe and widespread wet weather event," Mr Bernasconi said.
Higher falls are expected closer to the coast and conditions should stabilise in coming days.
Port Macquarie on the NSW mid-north coast recorded 195mm of rain in the 24 hours to 2pm on Thursday.
Rainfall totals above 50mm were widespread in coastal parts of Sydney, the Central Coast and Wollongong.
More than 356mm of rain has fallen in three weeks in Sydney's CBD, closing in on the city's all-time August record of 482mm, set in 1998.
In southeast Queensland, Yandina Creek on the Sunshine Coast received 71mm of rain in five hours from 9am on Thursday, with 54mm in the same period at Burleigh Waters on the Gold Coast.
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