It is any hours worked outside of the normal contract hours by an employee. Overtime can be both compulsory and optional. Read on.
  • Author: Siva
  • Last updated: May 21, 2022
  • 5 Minutes

For many people, overtime is necessary to bolster pay packets and allow them to pay for everyday things and treats. But it is a complicated subject and understanding all the rules and regulations that govern it can be tricky.

Never fear, however, because we are here to help. In this guide we will discuss what overtime is and how an employer will calculate it. We will also look at the legal side of it and what your rights are as an employee. Let’s begin.

What Is Overtime?

It is any hours worked outside of the normal contract hours by an employee. Overtime can be both compulsory and optional. If it is compulsory, employers should set out the rules for how they will administer it in an employee’s contract of employment.

What Is Overtime Pay?

Any pay for work outside the normal contracted hours. For example, if an employee’s contract states they must work 20 hours per week but they work 25 hours then they will receive 5 hours pay as overtime.

In the event of an employee being paid an annual salary and/or the contract states that hours can be flexible, the employee will not receive overtime pay.

Employers, however, need to be careful and ensure they are paying at least the National Minimum Wage on average.

When Does it Become Contractual?

Overtime, when undertaken, is always contractual. The contract of employment of an employee should always set out the details of it. It should state whether overtime is compulsory or optional as well as detailing any relevant rates of pay. If there are no overtime arrangements set out in a contract, employers cannot force employees to work beyond the contracted hours.

If an employer does not pay overtime, they must ensure that the average pay for the total hours worked does not fall below the National Minimum Wage.

Can I Refuse to Work Overtime?

In most cases, yes. An employer can only force you to work overtime if your contract says so. Even if it does, they cannot force you to work more than an average of 48 hours per week. This is set out in the Work Time Directive 1998. You can agree to work longer, but this agreement must be in writing and signed by you.

The Work Time Directive 1998 sets out exceptions to this rule and certain employees can be compelled to work more than 48 hours. These include:

  • Those working in security and surveillance.
  • Those working in the armed forces.
  • Those working in the emergency services or police.
  • An employee who works in a domestic job or in a private household.
  • Those who work as seafarers or on vessels on inland waterways.
  • Those in positions of power for who work time directive rules do not apply, such as managing executives of a company.

If an employee is under 18 years old, they the rules state they cannot work over 40 hours a week.

Can You Get Fired for Refusing to Work Overtime?

The answer depends on what your contract says about it. If your contract states that you must work overtime, then refusing to do so can lead to disciplinary action. If it does not, then your employer cannot force you to work extra hours.

Is it Something I am Entitled to?

In most cases, no. Unless your contract guarantees overtime, your employer can stop you from working it. However, your employer cannot discriminate against anyone. For example, they cannot prevent some employees from working beyond contracted hours while letting others do so.

Does an Employer Have to Pay Me for Overtime?

The law in the UK does not oblige employers to pay workers for it. However, your average pay for the total hours you work must not fall below the National Minimum Wage.

Whether or not an employer will pay overtime will be set out in contracts of employment. This should also set out any relevant rates of pay.

While there is no obligation for an employer to pay overtime, most businesses will. Paying workers for the hours they work is an intrinsic part of employment. Not paying for extra hours often leads to unhappy workers.

overtime rules and laws at work

What About if I am Part-time?

Employers must by law treat part-time workers the same as full-time staff. All part-time workers should normally get paid at their usual hourly rate if they work longer hours than set out in their employment contract.

As with full-time workers, some employees will not receive overtime pay if they work extra hours. If this is the case, employers should set out the details in the employee’s contract of employment.

Can I get Time Off for Overtime Instead of Being Paid?

Yes, you can. Some employers favour giving time off in lieu of overpaying for overtime. It is up to the employer whether this option is available. If it is, as with all other forms of it, it must be available to everyone and administered fairly.

Can I Get a Higher Rate of Pay for Overtime?

You will only get a higher rate of pay for overtime hours if your contract says you will. From time to time an employer may offer incentivised pay rates but this is purely at their discretion.

What Is the Law on Overtime In UK?

There are many laws pertaining to it in the UK. The main one is the Work Time Directive 1998. Within the Work Time Directive are rules and regulations for many things, including the previously mentioned 48-hour maximum working week.

How Is it Calculated and Paid?

The rate of pay an employer will pay an employee will be set out in their contract of employment. Contracts normally give this as an hourly rate. You can then calculate it by multiplying this rate by the hours you work.

Until you decide on a good overtime calculating software, please feel free to look at out free overtime calculator in the meanwhile.

Free Overtime and Pay Calculator


Is Overtime Included When Calculating Holiday Pay Entitlement?

All types of overtime, including voluntary, must be included when calculating a worker’s statutory holiday pay entitlement. However, it does not need to be included if the employee only works overtime occasionally or infrequently.

In Conclusion

Overtime is a complicated subject filled with pitfalls. Understanding all the rules can be a nightmare and figuring out what your rights are is an uphill struggle.

We hope you found this guide useful. Please feel free to browse the rest of our site for more helpful advice.

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Illustration by Victoria Chepkasova from Ouch!

Photo by Victoria Heath on Unsplash

Written by Siva

I write & describe the value & benefits delivered by Paperhift's rota planning, staff time tracking, and employee payroll management software. Especially useful for Shift Planners, Rota Managers, Team Admins, and HR Teams :-)