How overtime pay is calculated
Overtime pay is calculated by multiplying the number of overtime hours worked by your enhanced overtime hourly rate. Your overtime rate is determined by applying an agreed multiplier to your standard base hourly wage.
The most widespread overtime multiplier is time and a half (1.5x your base hourly rate). For instance, an employee on a regular wage of £20.00 per hour earns an overtime rate of £30.00 per hour.
Double time (2.0x your base rate) is often paid for weekend shifts, night work, or working on statutory public holidays. Employers may also specify custom multipliers depending on collective agreements or industry awards.
Worked example: 10 overtime hours at time and a half
Suppose an employee with a regular hourly rate of £20.00 per hour works 40 regular contracted hours and 10 overtime hours at time and a half (1.5x) in a weekly pay period.
Regular pay equals £800.00 (40 hours multiplied by £20.00).
The overtime hourly rate is £30.00 (£20.00 multiplied by 1.5). For 10 overtime hours, overtime pay equals £300.00 (10 hours multiplied by £30.00).
Total gross pay for the week is £1,100.00 (£800.00 regular pay plus £300.00 overtime pay) across 50.0 total hours worked, with overtime accounting for 27.3% of total wages.
Legal rights to overtime pay in the UK and US
In the UK, there is no automatic statutory right to enhanced overtime pay unless specifically guaranteed in your employment contract. However, your average pay across all hours worked must not fall below the National Minimum Wage or National Living Wage.
In the United States, under the Fair Labor Standards Act (FLSA), covered non-exempt employees must receive overtime pay for hours worked over 40 in a workweek at a rate not less than time and one-half their regular rate of pay.
Inputs for the Overtime calculator
Regular hourly rate
Your standard gross contractual hourly wage before any overtime premium.
Regular hours worked
The number of standard contracted hours worked at normal base rate in the pay period.
Overtime hours worked
The number of additional hours worked beyond your regular contracted hours eligible for premium pay.
Overtime pay rate
The agreed overtime multiplier applied to your hourly rate, such as time and a half (1.5x) or double time (2.0x).
Custom overtime multiplier
A custom multiplier value for premium shift arrangements such as bank holidays or unsocial hours.
Pay frequency
The payroll period corresponding to the hours entered, such as weekly, bi-weekly, or monthly.
CALCULATOR QUESTIONS
Overtime calculator questions
What is time and a half pay?
Time and a half means you receive 1.5 times your regular hourly rate for every eligible overtime hour worked. For example, if your base pay is £18 per hour, your time and a half rate is £27 per hour.
Is overtime taxed at a higher rate?
Overtime pay is taxed under the same income tax and National Insurance rules as regular wages. It is only taxed at a higher marginal rate if the extra earnings push your cumulative income into a higher tax bracket.
Can my employer force me to work overtime?
In the UK, you only have to work overtime if your employment contract states so. Even then, the Working Time Regulations generally cap the working week at 48 hours averaged over 17 weeks unless you sign an individual opt-out agreement.
Does overtime count toward holiday pay?
Yes. Under UK employment case law, regular and recurring voluntary overtime, as well as contractual compulsory overtime, must be included when calculating statutory holiday pay for the first 4 weeks of statutory leave.