PunchUK Overtime Rules: The 48-Hour Week, Minimum Wage, and What You Owe (2026)
UK Overtime Rules: The 48-Hour Week, Minimum Wage, and What You Owe (2026)
The short answer: UK law does not require you to pay a premium for overtime. That is where the good news ends. Every extra hour still counts toward the 48-hour weekly average, still counts against the National Living Wage, still has to respect daily and weekly rest, and, if it is regular, still flows into holiday pay. All four rules are tested against one thing: the hours your team actually worked. Punch records those hours at the moment someone punches in, so the answer is on file before anyone asks.
Owners coming from the US or Canada expect a fixed threshold and a fixed multiplier. The UK works differently. The rate is set by the contract. The limits are set by the Working Time Regulations 1998 and the minimum wage rules. Here is how each one works for a small team.
There Is No Statutory Overtime Rate
GOV.UK puts it plainly: employers do not have to pay workers for overtime. There is no UK equivalent of time and a half after 40 hours. Whether extra hours are paid at time and a half, at the basic rate, or not at all is a matter for the employment contract.
That makes the contract the first document that matters. If it promises time and a half after 40 hours, or double time on Sundays, that promise is enforceable. If it says nothing, overtime may be unpaid, but only within the limits below.
Some employers offer time off in lieu instead of overtime pay. That is lawful, but the terms have to be agreed, including when the time off can be taken. An agreement with no record of the hours behind it is a dispute waiting to happen.
Unpaid Overtime Can Push Pay Below the National Living Wage
From 1 April 2026, the National Living Wage is £12.71 an hour for workers aged 21 and over. The 18 to 20 rate is £10.85. The 16 to 17 rate and the apprentice rate are both £8.00.
Unpaid overtime does not change what you pay. It changes how many hours that pay is spread across. GOV.UK is clear that a worker's average hourly pay across all hours worked cannot fall below the minimum wage, even when some of those hours are unpaid.
Take a worker paid £560 a week for a 40-hour contract. That is £14.00 an hour, comfortably above £12.71. Now the crew runs late on a job and the week reaches 45 hours, with the extra five unpaid. The same £560 now covers 45 hours, which is £12.44 an hour. That week is below the National Living Wage, and the shortfall is £11.95 owed for one person in one week.
The break-even point on that contract is about 44 hours. Nobody runs that sum in their head on a Friday afternoon. It has to come from a record of real hours.
HMRC can ask for that record long after the fact. Minimum wage records must be kept for at least six years.
The 48-Hour Average and the Opt-Out
Workers aged 18 and over cannot work more than 48 hours a week on average, normally averaged over 17 weeks. A single 60-hour week is not a breach on its own. A run of them can be.
Here is the arithmetic. A worker who does ten weeks at 55 hours and seven weeks at 40 hours has worked 830 hours across 17 weeks. That is an average of 48.8 hours, over the limit. Cut the long weeks to eight and the average drops to 47.1. The difference between compliant and not is two weeks, and you only see it with weekly totals for each person.
A worker can choose to opt out of the 48-hour limit. The opt-out must be voluntary and in writing. A worker cannot be dismissed or treated unfairly for refusing. They can cancel it at any time, with at least 7 days' notice, or up to 3 months if the agreement says so. Some roles cannot opt out at all, including road transport drivers covered by drivers' hours rules.
Workers under 18 have no opt-out. They cannot work more than 8 hours a day or 40 hours a week.
Rest Breaks and Rest Between Shifts
Long days create a second set of obligations. Under GOV.UK's rest break guidance, a worker aged 18 or over who works more than 6 hours a day is entitled to one uninterrupted 20-minute break. The break can be unpaid if the contract says so.
On top of that, workers are entitled to 11 hours of rest between working days, and either 24 hours off each week or 48 hours off each fortnight. A crew that finishes a job at 10pm and is back on site at 7am has had 9 hours. That is a breach, and it is invisible unless both the finish and the start are recorded.
Regular Overtime Belongs in Holiday Pay
Holiday pay is the rule that catches owners who never pay overtime premiums at all. Under the holiday pay regulations that took effect on 1 January 2024, pay for the four weeks of EU-derived leave must include overtime that has been regularly paid to the worker in the last 52 weeks. The remaining 1.6 weeks of the 5.6-week entitlement can be paid at basic pay.
A worker who does paid Saturday work most weeks should not see their holiday pay fall back to the basic rate. Deciding whether overtime is regular means looking back a full year, week by week. That is a timesheet question, not a memory question.
How Punch Handles UK Working Time
Punch is built for the record every one of these rules depends on.
A UK overtime preset. Pick the United Kingdom at signup and Punch applies the Working Time Regulations preset, with pounds as the currency. Because UK overtime is set by contract, there is no imposed multiplier. If your contract pays time and a half after 40 hours, set that in Org Settings and every hour over the line is split out automatically.
Exact punches, every shift. Your team punches in and out, and punches lunch, from their phone. The 20-minute break is on the record. So is the gap between a 10pm finish and a 7am start.
A job-site geofence, not a camera. Punch-in can be restricted to a geofence around the site, so a punch from the van down the road does not count. There is no photo at punch and no facial recognition. Your crew's privacy stays intact.
Weekly totals for the 48-hour average. Weekly and bi-weekly pay periods roll up per person, and owner and manager Reports export those totals. Seventeen weeks of hours are a report, not a reconstruction.
Approvals before payroll. Managers approve hours or bulk approve a whole pay period, then export to QuickBooks Online or to a QuickBooks or Excel CSV for your payroll provider.
Holiday on the same record. Time-off requests go through Punch, so leave sits next to the worked hours your holiday pay calculation needs.
No signal, no gap. Punches made offline sync when the phone reconnects. A shared iPad in kiosk mode, with a PIN for each worker, covers a yard or workshop.
Frequently Asked Questions
Do UK employers have to pay overtime?
No. There is no statutory overtime rate in the UK. Overtime pay depends on the employment contract. Total pay across all hours worked must still average at least the minimum wage for the worker's age.
What is the National Living Wage in 2026?
£12.71 an hour for workers aged 21 and over, from 1 April 2026. The 18 to 20 rate is £10.85, and the 16 to 17 and apprentice rates are £8.00.
Can an employee work more than 48 hours a week in the UK?
Yes, if the average over the reference period, normally 17 weeks, stays at or below 48, or if the worker has signed a voluntary written opt-out. Workers under 18 cannot opt out.
Does overtime count toward holiday pay in the UK?
Regular overtime paid in the last 52 weeks must be included in pay for the four weeks of EU-derived leave. The remaining 1.6 weeks can be paid at the basic rate.
Keep a UK Record That Holds Up
UK overtime is not about a multiplier. It is about proving the hours: under the average, above the minimum wage, rested between shifts, and fairly reflected in holiday pay.
Punch records every punch in and punch out, applies your UK overtime settings, rolls up weekly totals, and exports approved hours straight to payroll. The price is flat per workspace, not per employee. Owners are always free, and every plan includes every feature. The 14-day free trial starts on signup, no credit card required.