Finance⏱ 5 min read
How to Calculate Overtime Pay in the UK
Overtime pay rules differ between employees on fixed salaries, hourly workers, and those on zero-hours contracts. Here's how to calculate what you're owed for every working arrangement.
Unlike the US, UK law has no statutory overtime premium — there's no legal requirement to pay 1.5x for overtime. What employers must do is ensure average hourly pay across all hours worked (including overtime) doesn't fall below the National Minimum Wage. Beyond that, the rate depends entirely on your contract.
The Legal Minimum
Average hourly rate across all hours = Total pay / Total hours worked
This average must be >= National Minimum Wage (NMW)
NMW 2024/25:
Age 21+: £11.44/hour
Age 18-20: £8.60/hour
Under 18: £6.40/hour
Apprentice: £6.40/hour
Example: Salaried worker, £28,000/year, contracted 37.5hr/week
Standard hourly rate: £28,000 / 52 / 37.5 = £14.36/hr
Works 5 hours overtime unpaid one week:
Total hours: 42.5. Total pay that week: £28,000/52 = £538.46
Average rate: £538.46 / 42.5 = £12.67/hr — above NMW ✓
Unpaid overtime is legal here, but check your contract.
Calculating Overtime at Common Multipliers
If your contract specifies overtime rates:
Time and a half (1.5x):
Overtime pay = Normal hourly rate x 1.5 x overtime hours
Double time (2x):
Overtime pay = Normal hourly rate x 2 x overtime hours
Example: hourly rate £14.00, 6 hours overtime
Time and a half: £14.00 x 1.5 x 6 = £126
Double time: £14.00 x 2.0 x 6 = £168
Overtime for Salaried Employees
Convert annual salary to hourly rate first:
Hourly rate = Annual salary / 52 weeks / contracted hours/week
£35,000 salary, 37.5hr contracted week:
Hourly rate = £35,000 / 52 / 37.5 = £17.95/hr
3 hours overtime at time-and-a-half:
Overtime pay = £17.95 x 1.5 x 3 = £80.77
Check: does your contract explicitly state overtime rates?
Many salaried roles have "reasonable overtime" clauses
requiring no extra pay — this is legal if above NMW.
Zero-Hours and Variable Hours Workers
Use average hourly pay from past 12 weeks to calculate
overtime entitlement (if any).
Holiday pay for zero-hours workers also uses the 12-week average:
Weekly holiday pay = Average weekly pay over last 12 weeks
If hours vary significantly week to week, track each week carefully.
Zero-hours workers have the same NMW rights as all other workers.
Tax on Overtime
Overtime is taxed as normal income — no special rate.
It's simply added to your gross pay for the pay period.
Example: Basic salary £2,000/month, £400 overtime
Gross this month: £2,400
Tax and NI calculated on £2,400 total
(You don't pay 40% on the overtime unless the total takes
you into the higher-rate band for that month's pay)
Note: if overtime pushes a single month's pay into the higher
band, you may temporarily pay 40% on a portion — but
HMRC adjusts this through your annual tax code.
You won't permanently pay more tax due to a one-off overtime spike.