How to Calculate Overtime Pay in the UK and US

If you've worked longer than your standard hours, you're owed something for that time — but what exactly depends on where you work. In the UK, there's no statutory overtime rate; it's whatever your contract says. In the US, the Fair Labor Standards Act mandates time-and-a-half (1.5× your regular hourly rate) for hours over 40 per week. This guide explains how to calculate overtime pay, what you're legally entitled to, and how to handle disputes.

How Overtime Pay Works in the UK

Here's the tricky part: the UK doesn't legally require employers to pay overtime at all. Your right to overtime pay exists only if your contract says it does. Most contracts either:

Pay no overtime premium — You work the extra hours at your normal hourly rate
Pay time-and-a-half or double-time — You get 1.5× or 2× your hourly rate for hours over your standard week
Offer time off instead (TOIL) — You get paid for the extra hours but as future days off

The one legal protection: you must still earn at least the National Minimum Wage for every hour you work, including overtime. So if you're paid £11/hour and your contract says "no overtime premium," you still earn £11/hour for those hours — not a penny less.

To calculate UK overtime pay, use this formula:

Overtime pay = (Hourly rate × Overtime multiplier) × Overtime hours

Worked example: You earn £30,000/year on a 40-hour week, giving you a standard hourly rate of roughly £14.42. Your contract says "time-and-a-half for hours over 40." One week you work 50 hours:

40 hours at £14.42 = £576.80
10 hours at £21.63 (1.5 × £14.42) = £216.30
Weekly total: £793.10 (compared to £576.80 if no overtime premium)

That overtime premium gets added to your gross pay and taxed at your normal marginal rate (more on this below).

How Overtime Pay Works in the US

The Fair Labor Standards Act (FLSA) sets the federal minimum: non-exempt employees must be paid 1.5× their regular rate for hours worked over 40 per week. Your regular rate is your total weekly pay divided by total hours worked — not just your hourly wage if you're salaried.

To calculate US overtime pay:

Overtime pay = (Regular hourly rate × 1.5) × Overtime hours

If you're paid bonuses, commissions, or shift differentials, these can affect your "regular rate" calculation. Some states go further than federal law: California requires daily overtime (any hours over 8 in a single day), and Massachusetts and New York have additional rules. Always check your state labor board.

Worked example: You're salaried at $52,000/year, paid weekly ($1,000/week), usually working 40 hours. That's a regular rate of $25/hour. One week you work 45 hours:

40 hours at $25 = $1,000
5 hours at $37.50 (1.5 × $25) = $187.50
Weekly total: $1,187.50

Common Overtime Scenarios and How to Calculate Them

Scenario 1: UK shift worker, contract specifies double-time for nights

You work nights at a supermarket earning £11.44/hour, with double-time for shifts after midnight. One week:

Monday–Friday: 8 hours each at standard rate = 40 hours × £11.44 = £457.60
Saturday: 8-hour night shift at £22.88 (double-time) = £183.04
Gross for the week: £640.64

Scenario 2: US hourly worker with variable hours

You earn $18/hour. One pay period (two weeks):

Week 1: 45 hours (5 hours overtime)
Week 2: 38 hours (no overtime)
Overtime pay: 5 hours × $27 (1.5 × $18) = $135
Regular hours: 83 hours × $18 = $1,494
Two-week total: $1,629

Scenario 3: UK salaried employee, no overtime clause

You're salaried at £50,000/year on a 37.5-hour contract. Your contract says "hours as required" but specifies no overtime premium. One week you work 50 hours.

Your hourly rate is £50,000 ÷ 52 weeks ÷ 37.5 hours = £25.64/hour. But because there's no overtime clause, you're paid your normal weekly salary regardless — roughly £961.54. You've worked an extra 12.5 hours for free (which explains why understanding your contract matters more than most people think).

What You Need to Know About Overtime Rights

UK employees:

Your contract is your only source of overtime rights beyond minimum wage
If unsure what your contract says, request a copy in writing from HR
Statutory sick pay and statutory holiday pay are guaranteed by law; overtime is not
If you're regularly working unpaid overtime and earning less than minimum wage per hour across all hours, you can contact ACAS for free advice
Shift workers and night shift premiums follow the same rule — check your contract

US employees:

If you're non-exempt (most hourly workers and many salaried roles), you must be paid overtime
Misclassifying someone as "exempt" to dodge overtime is illegal. The exemption rules are strict: you must be paid at least [STAT NEEDED: current federal threshold] annually and spend most of your time on genuinely exempt duties (management, professional, administrative)
Comp time ("we'll give you time off instead of pay") is only legal in the public sector; private employers must pay
If overtime is withheld, contact the Department of Labor Wage and Hour Division

Both countries:

Overtime hours usually count toward redundancy pay, holiday pay, and maternity/paternity pay calculations (though rules vary — check your contract)
Claiming unpaid overtime is a legal right and won't make you "difficult"

How Overtime Affects Your Tax and Take-Home Pay

Overtime is taxed as ordinary income at your marginal rate. It's not a special "bonus tax" — just regular income tax plus National Insurance (UK) or FICA (US).

UK example: You earn £32,000/year (basic rate taxpayer at 20% income tax). Overtime adds £2,000:

Income tax on the £2,000: 20% = £400
National Insurance (8% on earnings up to £50,270): 8% = £160
Take-home: £1,440 of the £2,000 (28% effective rate)

If overtime pushes you past £50,270 (the higher rate threshold), only the portion above that point is taxed at 40%. Overtime can also affect your pension contribution decisions — some people sacrifice gross pay into pensions to stay below the higher rate threshold.

US example: You earn $50,000/year, and overtime adds $3,000. Federal income tax (likely 22% bracket) plus FICA (6.2% Social Security + 1.45% Medicare) reduces it:

Federal income tax: ~$660
FICA (7.65%): ~$229
Take-home: ~$2,111 of $3,000 (30% effective rate)

State taxes vary — check your state labor board for exact figures. Understanding your effective tax rate helps you see the real value of overtime versus a pay rise.

When Overtime Rules Differ Across Jobs

If you work multiple jobs or move between sectors, overtime rules can change. Public sector versus private sector pay often differs on overtime eligibility. Agency workers have different protections than direct employees. Always clarify overtime expectations when starting a new role, especially if you're picking up extra work.

Frequently Asked Questions

Q: I work in the UK and my contract says "time-and-a-half after 37.5 hours," but I'm not being paid it. What do I do?

A: Ask your employer in writing (email counts). Keep a record of the hours you've worked and what you were paid. If they refuse, contact ACAS for free advice. You can claim back overtime pay for up to two years.

Q: Is overtime mandatory in the UK?

A: No. Your contract governs overtime. If it says "no overtime premium," you can't be forced to work extra hours at a higher rate. You can be required to work the hours as part of "as required" clauses — you just don't get paid more unless the contract says so.

Q: In the US, my employer says I'm "salaried" so I don't get overtime. Is that legal?

A: Not always. Salaried employees can be exempt only if they meet strict criteria: earning above the federal threshold (currently [STAT NEEDED: current threshold]) and performing genuinely exempt duties. If you're salaried at $25k answering phones, you're probably misclassified and entitled to overtime.

Q: Does overtime count toward my redundancy or holiday pay in the UK?

A: Yes, typically. Redundancy is usually based on your average pay over the last 12 weeks, which includes regularly earned overtime. Holiday pay (when you take time off) is also usually based on your average, including overtime. Check your contract or ask HR.

Q: Can my employer force me to work overtime?

A: In the UK, if "overtime" or "additional hours as required" is in your contract, yes. In the US, non-exempt employees can generally be required to work overtime, and refusal can be grounds for dismissal. However, if working overtime would violate safety rules (e.g., driving-time limits) or other laws, that's different.

Q: Do I need to keep my own record of overtime hours, or should my employer track it?

A: Your employer should track it via a timesheet or payroll system. But keep your own record too — photos of timesheets, email confirmations of hours, or a simple spreadsheet. If there's ever a dispute, your documentation is evidence.

Q: I'm on a zero-hours contract in the UK — am I entitled to overtime?

A: Only if your contract explicitly says so. Minimum wage still applies to every hour you work, but there's no automatic overtime premium. Many zero-hours workers negotiate a premium rate as part of their agreement.

Q: How does overtime work if I'm paid monthly instead of weekly?

A: You calculate it the same way — total hours over the threshold divided by the multiplier — but it's tallied across the month. A month with 170 hours works (e.g., 40-hour weeks × 4.25 weeks) means anything over that is overtime.