How Is Overtime Calculated
Overtime is calculated by multiplying your hourly rate by the overtime hours, with a premium applied where your contract provides one. The most common premium is time and a half: 1.5 times the normal hourly rate. Some contracts pay double time for Sundays or bank holidays, and some pay no premium at all for the first extra hours.
Worked example: at £15 an hour, ten hours of overtime at time and a half pays £225, compared with £150 at the normal rate. If your contract also counts overtime towards holiday pay or pension, those amounts rise too, so check the contract rather than assuming the headline figure is the whole story.
Salaried staff should check whether overtime applies to them at all. Many salaried contracts include a reasonable amount of extra hours in the salary, with overtime paid only beyond a threshold, or time off in lieu instead of payment. The calculation starts with the contract, not with the clock.
- Overtime pay = hourly rate × premium × overtime hours.
- Time and a half (1.5x) is the most common premium.
- Check your contract: salaried roles may include extra hours already.
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