How to calculate overtime pay: rates, examples and UK/Irish rules
In the UK and Ireland there is no general legal right to extra pay for overtime – the rate comes from the contract, a collective agreement or a sector order. To calculate it, work out the hourly rate, multiply by the agreed premium (often 1.5× or 2×), and check that average pay never falls below the minimum wage.
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Step 1: work out the hourly rate
For hourly-paid staff, the hourly rate is in the contract. For salaried staff, divide annual salary by the contracted hours in a year:
Hourly rate = annual salary ÷ (contracted weekly hours × 52)
Example: a salary of €36,000 for a 39-hour week → 36,000 ÷ (39 × 52) = 36,000 ÷ 2,028 = €17.75 per hour (rounded). Some employers use the number of working days in the year or a monthly divisor instead – use the method in your contract or payroll policy and apply it consistently.
Use basic pay, not bonuses, allowances or commission, unless your contract says the overtime rate is calculated on a wider definition of pay.
Step 2: apply the overtime rate
| Common name | Multiplier | Typical use (if agreed) |
|---|---|---|
| Plain time | 1.0× | Overtime paid at the normal rate, common for salaried staff |
| Time and a quarter | 1.25× | Evenings or first hours of overtime in some sectors |
| Time and a half | 1.5× | Weekday overtime – the most common premium |
| Double time | 2.0× | Sundays, public holidays or long overtime in some agreements |
| TOIL (time off in lieu) | Hours back as paid time off | Instead of money, if the contract allows |
Worked example (salaried employee)
- Hourly rate: €17.75
- 8 weekday overtime hours at time and a half: 8 × 17.75 × 1.5 = €213.00
- 4 Sunday hours at double time (per contract): 4 × 17.75 × 2 = €142.00
- Total overtime pay for the month: €355.00 gross
Worked example (hourly employee)
An employee paid £13.50 an hour works 6 hours of overtime at time and a half: 6 × 13.50 × 1.5 = £121.50 gross. At plain time it would be £81.00.
All amounts are gross; tax and social insurance are deducted as for normal pay. Check how overtime appears on payslips with your payroll provider or accountant.
UK rules that affect overtime pay
- No statutory overtime premium. GOV.UK states employers don't have to pay workers for overtime; the rate is set by the contract.
- Minimum wage averaging. Even if overtime is unpaid, the worker's average pay for all hours worked in the pay reference period must not fall below the National Minimum Wage or National Living Wage.
- 48-hour average week. Overtime counts towards the 48-hour limit under the Working Time Regulations, averaged over 17 weeks, unless the worker has signed an opt-out.
- Compulsory overtime can only be required if the contract says so.
- Holiday pay. For the first 4 weeks of statutory leave, holiday pay must reflect normal pay, which includes regular overtime.
- Records. Minimum wage records (total pay and hours, including overtime) must be kept for at least 6 years; holiday records for 6 years from April 2026.
Minimum wage check: example
A salaried worker is paid £2,300 for a month in which they actually worked 190 hours, including unpaid overtime. Average pay: 2,300 ÷ 190 = £12.11 per hour. Compare that with the current minimum wage for the worker's age on GOV.UK – if it is lower, you owe arrears. This is exactly why recording real hours matters, not just contracted ones.
Irish rules that affect overtime pay
- No general right to overtime pay. It depends on the contract, or on a legally binding Sectoral Employment Order or Employment Regulation Order where one applies to your sector (for example, construction has its own sector rates).
- 48-hour average week, normally averaged over 4 months (Organisation of Working Time Act 1997, s. 15).
- Sunday work must be compensated – by a premium, a payment, time off or a combination – if not already reflected in pay (s. 14).
- Public holidays: the employee gets a paid day off, an extra day's annual leave or an extra day's pay, as the employer decides (s. 21).
- Minimum wage: average hourly pay over the pay reference period must not fall below the national minimum wage.
- Records: hours worked must be recorded and kept for 3 years; without records, the employer must prove compliance.
Overtime calculated from real clock-ins
Calculating the money is the easy part. The hard part is knowing how many hours were really worked. In QRtimetrack, employees clock in from their phone (QR code, GPS zone, optional selfie) or at an entrance tablet, and the app calculates breaks, overtime and weekend hours from the real punches.
- Overtime confirmation: an employee who stays past the schedule confirms with the QR code and a photo that they're still on site; without confirmation they're clocked out at the scheduled end. You pay for real overtime, not time spent on the phone.
- Separate columns for overtime, night and weekend hours in Excel, CSV or PDF exports.
- Month close: employees confirm their hours from the phone, so overtime disputes are settled before payroll.
Pricing: €1.99 per active employee per month, minimum €9.95/month (5 employees), excl. VAT. 7-day free trial, no card. See also night work rules and pay and our free timesheet template.
Frequently asked questions
Is overtime pay a legal requirement in the UK?
No. There is no statutory overtime premium in the UK. The contract decides whether overtime is paid and at what rate. The legal floor is the minimum wage: average pay across all hours worked in the pay reference period must not fall below it.
Is overtime pay a legal requirement in Ireland?
Not in general. Overtime rates come from the contract, or from a Sectoral Employment Order or Employment Regulation Order where your sector is covered. Sunday work must be compensated in some way, and public holidays carry their own entitlement.
How do I calculate time and a half?
Multiply the hourly rate by 1.5, then by the overtime hours. At €17.75 an hour, one hour at time and a half is €26.63 (rounded), and 8 hours come to €213.00 gross.
Can I give time off instead of paying overtime?
Yes, if the contract or a workplace agreement allows time off in lieu (TOIL). Record the overtime hours and the time off taken, and check that the worker's pay still averages at least the minimum wage over the pay reference period.
Does overtime count for holiday pay?
In the UK, regular overtime is part of normal pay for the first 4 weeks of statutory holiday. In Ireland, holiday pay is based on normal weekly pay, which can include regular overtime. Check your payroll treatment with your accountant.
Can employers make staff work overtime?
Only if the contract says so, and within working time limits – in the UK the 48-hour average (unless the worker opts out), in Ireland the 48-hour average with no individual opt-out. Rest periods still apply.