How to Calculate Overtime Pay in the UK (With Examples)
There is no statutory right to overtime pay in the UK — employers are not legally required to pay a premium rate for overtime hours. However, your overall pay, including any overtime worked, must not fall below the National Minimum Wage when averaged across total hours worked. Many employment contracts also include specific overtime provisions.
The Legal Position on Overtime
The key rules:
- No automatic premium rate — UK law does not require time-and-a-half or double time
- National Minimum Wage must be maintained — average hourly pay (including overtime hours) must meet NMW
- 48-hour average limit — workers cannot be required to work more than 48 hours per week on average unless they have opted out in writing
- Contractual terms govern — if the employment contract specifies overtime rates, those are legally binding
How to Calculate Overtime Pay
Example 1 — Hourly Worker, No Overtime Premium
- Hourly rate: £13.00
- Standard hours: 37 per week
- Overtime hours: 5
- Overtime rate: Standard (no premium)
Calculation:
- Standard pay: 37 × £13.00 = £481.00
- Overtime pay: 5 × £13.00 = £65.00
- Total: £546.00
Example 2 — Hourly Worker, Time and a Half Overtime
- Hourly rate: £12.00
- Standard hours: 40 per week
- Overtime hours: 8
- Overtime rate: 1.5× (time and a half)
Calculation:
- Standard pay: 40 × £12.00 = £480.00
- Overtime rate: £12.00 × 1.5 = £18.00
- Overtime pay: 8 × £18.00 = £144.00
- Total: £624.00
Example 3 — Salaried Worker, Checking NMW Compliance
- Annual salary: £26,000
- Monthly pay: £2,166.67
- Standard hours: 37.5/week = 162.5/month
- Actual hours worked: 185/month (22.5 hours overtime)
NMW check:
- Hourly rate: £2,166.67 ÷ 185 = £11.71/hour
- 2024/25 NMW (age 21+): £11.44/hour
- Compliant — but only just
If overtime hours increase further, the employer risks NMW breach.
Tracking Hours Is Essential
Without accurate time records, employers cannot check NMW compliance and employees cannot verify they are being paid correctly. This is why hour tracking matters even for salaried workers.
HonestHours makes it easy to log hours in real time, flag overtime, and export weekly reports for payroll. It's free for small businesses and runs in your browser.
Install at honesthours.io.
Frequently Asked Questions
Is overtime pay compulsory in the UK?
There is no statutory requirement to pay a premium rate for overtime. However, total pay divided by total hours must not fall below the National Minimum Wage, and any contractual overtime provisions must be honoured.
What is the standard overtime rate in the UK?
There is no standard rate. Time-and-a-half (1.5×) and double time (2×) are common contractual arrangements, but they are not legally required unless specified in the employment contract.
Can I require employees to work overtime?
Only if the employment contract includes a compulsory overtime clause. You cannot force employees to work overtime if it is not in their contract. Additionally, even with an opt-out, no worker can be required to exceed an average of 48 hours per week.
How do I track overtime accurately for payroll?
A time tracking tool like HonestHours lets employees log start and end times, automatically calculates total hours, and flags overtime against contracted hours. Reports can be exported directly for payroll processing.
Track time free — no subscription
HonestHours is a free Chrome extension for small businesses and freelancers.
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