Overtime Calculator — Work Out Your Extra Pay

Understanding Overtime Pay in the UK

Overtime is any time you work beyond your contracted hours. In the United Kingdom, overtime arrangements are governed by your employment contract rather than statute law. This means there is no legal requirement for employers to pay any premium for overtime hours — it is entirely a matter between you and your employer.

That said, many UK employers do pay enhanced rates for overtime as standard practice, particularly in sectors like manufacturing, healthcare, hospitality, retail, and transport. The most common overtime rates are time and a half (1.5x your normal rate) and double time (2x), with the latter often reserved for Sundays, bank holidays, or night shifts.

Common Overtime Rates Explained

UK Overtime Law — Your Rights

While the UK does not have a legal overtime premium, several important rules protect workers:

Working Time Regulations 1998

• 48-hour limit: Workers cannot be required to work more than an average of 48 hours per week, calculated over a 17-week reference period. You can voluntarily opt out of this limit in writing.
• Daily rest: You are entitled to at least 11 consecutive hours of rest between working days.
• Weekly rest: You are entitled to an uninterrupted 24-hour period without work each week (or 48 hours per fortnight).
• Rest breaks: If you work more than 6 hours in a day, you are entitled to a 20-minute rest break.

Minimum Wage and Overtime

Even if your employer does not pay an overtime premium, your average hourly pay across all hours worked must not fall below the National Minimum Wage. This is particularly relevant for salaried employees who work unpaid overtime — if the extra hours bring your effective hourly rate below minimum wage, your employer is breaking the law.

Contractual vs Voluntary Overtime

• Contractual overtime: Your contract states you must work overtime when asked. This is a binding term and refusal could be a disciplinary matter. The contract should also specify whether and how overtime is compensated.
• Voluntary overtime: You choose whether to accept extra hours. Your employer cannot penalise you for declining. Many employers offer voluntary overtime on a first-come, first-served basis.
• Non-guaranteed overtime: Your employer does not have to offer overtime, but if they do, you must accept it. This is a middle ground used in some contracts.

Is Overtime Taxed Differently?

No. Overtime is not subject to a special tax rate. It is added to your regular earnings and taxed through PAYE at your normal rate. However, a large amount of overtime in a single pay period could push your total earnings into a higher tax band for that month, meaning you pay more tax than usual. This normally balances out over the tax year, but it can cause temporary fluctuations in your take-home pay.

If you are regularly pushed into a higher tax band by overtime, consider using the salary calculator with your total annual earnings (base + overtime) to see your true annual tax position.

Tips for Maximising Overtime Earnings

1. Check your contract: Know exactly what rate your employer pays for overtime and whether it differs for weekdays, weekends, and bank holidays.
2. Track your hours: Keep a personal record of all hours worked. This protects you in any dispute about overtime pay.
3. Know your tax position: If overtime pushes you close to the £50,270 higher-rate threshold, be aware that earnings above this are taxed at 40% (plus 2% NI), giving you a marginal rate of 42%.
4. Consider pension impact: If your pension contributions are a percentage of total pay (including overtime), more overtime means more pension savings.