Overtime pay involves calculating an employee’s pay over regular working hours. You can use our Overtime Calculator to find out how much you have to pay your employees for overtime work.
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The overtime law in the UK
Mandatory Overtime
The employment contract will specify the details regarding overtime pay as employers are not required by law to pay an employee for overtime work. A contract may specify that an employee needs to work overtime without additional pay. However, the employee’s average hourly pay cannot fall below the National Minimum Wage and an employee cannot be forced to work for more than 48 hours per week on average unless there is a signed agreement between the employee and employer. It must be noted that unless a contract guarantees overtime, the employer can reject an employee’s request to work overtime as long as it’s not discriminatory i.e. some employees allowed to work overtime and others not.
Paid Overtime
Employers will generally pay part-time staff for overtime if at least one of the following three applies:
- The employee works longer hours than those stated in the employment contract
- The employee works more than normal working hours of full time staff and full time staff would receive extra pay for working such hours
- The employee works at unsocial times (e.g. late at night) and full-time staff would get extra pay during these hours
Can I refuse to work overtime?
Employees only have to work overtime if your employment contracts says so. Even if it does, by law, you cannot usually be forced to work more than an average of 48 hours per week. An employee can agree to work longer, however, this agreement must be in writing and signed by the employee.
How to calculate overtime pay
Below you can find a quick explanation of how our overtime calculator works. The calculator works out the employee weekly pay and working hours and divides the two to find the employee’s hourly pay. It then multiplies the hourly wage rate by the number of overtime hours worked and the multiplier to find the overtime pay.
Determine earnings basis
State the employee earnings and the frequency of such earnings (i.e. annually, monthly, weekly or daily)
Enter regular working hours
State the employee’s regular working hours and the the interval over which the employee works these hours (i.e. weekly or daily)
Set regular work schedule
If either the earnings or the regular working hours frequency is daily, we need the number of days an employee works during a week to calculate the weekly earnings and/or the weekly working hours. As said above, the calculator divides the weekly pay by the weekly working hours to find the employee’s hourly pay
Set an overtime multiplier
This is the premium (if any) that is applied to the normal wage rate. For example if an employee earns £20 per hour and for overtime working hours the employer pays a 50% premium (i.e. multiplier = 1.5), the employee gets paid £30 for each hour of overtime work. If the employer does not pay any premium, then the multiplier is 1
Enter overtime hours worked
The number of hours an employee worked overtime. This is multiplied by the employees’ hourly rate and the multiplier to find the overtime payment amount
Find this overtime calculator useful?
Use the other free payroll calculators to make your life easier
Checkout this other useful guides relating to overtime pay