Overtime

What overtime is, the main types of overtime hours, how overtime differs from time off in lieu, and what the rules on working time say

Home HR glossary for HR teams

Overtime

What is overtime?

Overtime is work done beyond an employee's contracted or standard working hours. If someone's normal day is 8 hours and they work 10, the extra 2 hours are overtime.

Overtime differs from ordinary hours in two ways: it is often paid at a higher rate or compensated with time off, and working time rules limit how much of it there can be. That is why each overtime hour needs to be recorded, approved and passed to payroll separately.

Types of overtime hours

Type	When it happens
Ordinary	extra hours on a normal working day
Night	overtime that falls within the night window, for example 22:00 to 06:00
Weekend	work on a rest day that is not swapped for another day off
Public holiday	work on a bank or public holiday
On-call and call-outs	work outside the schedule when called in, if it counts as overtime

Overtime vs time off in lieu vs flexible hours

	Overtime	Time off in lieu (TOIL)	Flexitime
What it is	work beyond contracted hours	overtime repaid with time off	flexible start and finish times within a set total
Compensation	usually extra pay	time off instead of pay	none, total hours stay the same
Limits	working time rules	company policy	company policy

Read more about repaying overtime with time off in our article on time off in lieu.

How to manage overtime in 5 steps

Set the rules. When overtime is allowed, who can request it, which types of hours exist and how each is compensated.
Approve before or right after. Every overtime hour should be approved by a manager, otherwise labour costs quickly get out of hand.
Record time accurately. Time tracking and timesheets show how many hours were worked beyond the norm and on which days.
Split hours by type. Night, weekend and holiday hours are often paid differently from ordinary ones, so a single shift can contain several types.
Look at the causes. Constant overtime signals understaffing or poor planning and leads to burnout.

For how to calculate overtime pay and send hours to payroll without spreadsheets, read our article on overtime automation.

Overtime rules in the UK

Under the Working Time Regulations 1998, workers cannot be required to work more than 48 hours a week on average, normally calculated over 17 weeks, unless they choose to opt out in writing. Under-18s cannot opt out and are limited to 8 hours a day and 40 hours a week.

There is no legal right to extra pay for overtime in the UK: the rate is set by the contract. However, average pay for all hours worked must not fall below the National Minimum Wage, and regular overtime has to be included when calculating holiday pay for the first four weeks of leave.

In Time, overtime tracking is set up in the attendance policy for each location. You create overtime types with a pay multiplier (for example 2 for holiday hours) and a compensation method: paid through payroll or taken as time off. The system splits each request into types by weekday, day type and time window, so an 18:00 to 23:30 shift is automatically divided into ordinary and night hours. Overtime tracking turns on mandatory approval with a multi-step chain, and approved hours with their types and multipliers go into the export for payroll.