Overtime Pay Guide: Rates, Tax & How to Calculate
UK Overtime Rules
There is no legal requirement for UK employers to pay a premium rate for overtime. Unlike the US (where overtime is 1.5x after 40 hours), UK overtime rates are set by your employment contract. Common rates are time-and-a-half (1.5x) or double time (2x), but standard rate (1x) is also common.
Your average hourly rate must not fall below the National Living Wage (£12.21/hour for 23+ year olds in 2025/26) when overtime hours are included.
How Overtime Is Taxed
Overtime is taxed the same as regular income through PAYE. There is no special tax rate for overtime. If overtime pushes your total earnings into the higher tax band (above £50,270), the extra amount is taxed at 40% instead of 20%. National Insurance also applies at the standard rates.
Calculating Overtime Pay
For time-and-a-half on a £15/hour base rate: £15 x 1.5 = £22.50/hour overtime. For 10 hours overtime per week: £22.50 x 10 = £225 gross per week (£11,700/year). After tax (basic rate), that's roughly £8,775 net per year.
Your Rights
You cannot be forced to work more than 48 hours per week on average (Working Time Directive) unless you have opted out in writing. Your employer must pay you for all hours worked. Zero-hours and agency workers have the same overtime pay rights.
Is Overtime Worth It?
After tax and NI, overtime at the basic rate yields about 68p per pound earned. At the higher rate, it drops to about 48p. Consider whether the extra hours are worth the take-home pay.
Related Calculators
Frequently Asked Questions
Is overtime taxed more in the UK?
No. Overtime is taxed at your normal income tax rate through PAYE. However, if overtime pushes your total earnings into the higher tax band (above £50,270), the additional amount is taxed at 40%.
Can my employer make me work overtime?
Only if your contract requires it. You cannot be forced to work more than 48 hours per week on average unless you've signed a written opt-out of the Working Time Directive.