Calculating overtime pay in the UK (2026)
There is no statutory right to "overtime pay" in the UK in the way the US has it — the law does not require time-and-a-half. But there are clear rules about when extra hours must be paid at all, how holiday pay is affected, and what your contracts must say.
This guide walks through what the law actually requires and the rates most UK hospitality employers use in practice.
- 1
Check the contract first
Whether overtime is paid, and at what rate, is set by the employment contract. The default position is that hours over the contracted weekly amount must be paid at the worker’s normal hourly rate, not at a premium — unless the contract says otherwise.
- 2
Confirm National Minimum Wage compliance
Once you average all paid hours and total pay across the pay reference period, the result must not fall below the National Minimum Wage for that worker’s age band. This is the only legally hard floor on overtime.
- 3
Apply your premium (if any)
Common UK hospitality premiums: time-and-a-quarter (1.25x) for hours over 40 in a week; time-and-a-half (1.5x) for bank holidays and Sundays; double-time (2.0x) for Christmas Day. Use whichever your contract specifies.
- 4
Include overtime in holiday pay
Regular, predictable overtime must be included when calculating holiday pay (post-Bear Scotland and the 2023 retained EU law reforms). The reference period for variable pay is now 52 weeks. If a worker has consistently done 5 hours of overtime per week, that goes into their holiday pay calculation.
- 5
Track it accurately
Use your rota / timesheet system to record the worker’s contracted hours, actual hours worked, and any premium-eligible hours separately. This protects you in a dispute and makes payroll cleaner.
Worked example
Sam is contracted for 30 hours a week at £12.50/hour. The contract says hours over 40 in a week are paid at 1.5x. In one week Sam works 44 hours.
Standard pay: 30 × £12.50 = £375.
Hours 31–40 (10 hours) at standard rate: 10 × £12.50 = £125.
Hours 41–44 (4 hours) at 1.5x: 4 × £18.75 = £75.
Total weekly pay: £575.
Common pitfalls
Treating "all hours over 40" as overtime when the contract says 37.5 — pay must follow the contract.
Not including overtime in holiday pay when the worker does it most weeks — this is a common Employment Tribunal claim.
Letting workers exceed the 48-hour weekly limit without an opt-out agreement — overtime doesn’t override Working Time Regulations.
Related resources
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