What this calculator works out
This calculator multiplies your normal hourly rate by the overtime hours worked and the enhancement your employer applies, returning the gross overtime pay and the effective hourly rate for those hours.
It is gross pay only. Overtime is taxed like any other earnings, and because it sits on top of your normal pay it is taxed at your highest rate — which is why overtime often feels smaller in the account than on paper.
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Before you calculate
- Check your contract for the actual enhancement. Time and a half (1.5) and double time (2.0) are common, but many contracts pay a flat rate with no enhancement at all.
- Confirm whether different rates apply to weekdays, weekends and bank holidays. They frequently do.
- Use your basic hourly rate, not an average that already includes previous overtime.
- Remember there is no statutory right to enhanced overtime pay in the UK — it depends entirely on your contract.
Because overtime is added on top of normal earnings, every pound is taxed at the highest rate you reach. For a basic rate taxpayer that means 20% tax plus 8% National Insurance, so roughly 72p of each pound arrives. Someone whose overtime pushes them into the higher rate keeps closer to 58p.
How this calculator works
A single multiplication, plus the effective rate:
Overtime gross pay = normal hourly rate × overtime hours × multiplier
Effective overtime rate = normal hourly rate × multiplierThe multiplier is the enhancement your employer applies: 1.0 for flat rate, 1.5 for time and a half, 2.0 for double time. Where a contract pays a fixed premium per hour rather than a multiple, divide the enhanced rate by your normal rate to find the equivalent multiplier.
Worked example: ten hours at time and a half
Using the default figures — a £15 normal rate, 10 overtime hours, at a 1.5 multiplier:
- Effective overtime rate: £15 × 1.5 = £22.50 an hour
- Gross overtime pay: £22.50 × 10 = £225
After basic rate tax and National Insurance, roughly £162 of that reaches your account. Worth knowing before deciding whether ten hours of your weekend is a good trade — and worth comparing against the enhancement itself. At a flat rate with no enhancement, the same ten hours would gross £150 and net about £108.
Common mistakes
- Assuming overtime must be paid at an enhanced rate. There is no statutory requirement in the UK; it is a contractual matter.
- Budgeting on gross overtime. Around 28% disappears for a basic rate taxpayer, more if the extra earnings cross a threshold.
- Treating irregular overtime as regular income. Lenders generally discount or exclude it unless it is guaranteed and evidenced.
- Forgetting that overtime can affect holiday pay. Regular overtime should generally be reflected in holiday pay calculations.
- Overlooking working time limits. The average 48-hour week applies unless you have opted out in writing.
Frequently asked questions
Am I entitled to extra pay for overtime?
Not automatically. UK law does not require an enhanced overtime rate. What it does require is that your average pay across the hours worked does not fall below the National Minimum Wage, and that working time limits are respected. Everything above that is down to your contract or a collective agreement.
Why does overtime seem to be taxed so heavily?
It is taxed at the same rates as the rest of your pay, but because it stacks on top it is all charged at your marginal rate — there is no allowance left to shelter it. In a month with a lot of overtime, PAYE may also over-deduct temporarily because it projects the higher figure forward; this usually corrects itself over the tax year.
Does overtime count towards holiday pay?
Regular overtime generally should be included in holiday pay for at least part of your entitlement, following case law in this area. The detail depends on how regular the overtime is and how your employer calculates holiday pay. ACAS provides guidance, and your employer should be able to explain their method.
Will overtime help a mortgage application?
Sometimes, but less than the amount suggests. Lenders typically want to see it evidenced over several months or a year, and many will only count a proportion — often 50% — of non-guaranteed overtime. Guaranteed contractual overtime is treated more favourably.
Can I be made to work overtime?
It depends on your contract. Some contracts require reasonable additional hours; others make overtime voluntary. Regardless, the average 48-hour working week limit applies unless you have signed an individual opt-out, which you can withdraw with notice.
Related tools
References
- GOV.UK — overtime rules, working time limits and minimum wage requirements
- MoneyHelper — guidance on variable income and budgeting around it
Sources are checked at publication and can change — how I choose and check references.