The UK sets no statutory overtime premium rate. Employers decide overtime pay through employment contracts or collective agreements - or they don't pay extra at all. That's legal. The trap is the National Minimum Wage, which applies to every hour worked and cuts salaried workers' effective hourly rates when hours rise.
The Working Time Regulations 1998
The Working Time Regulations cap average weekly hours at 48, measured over a 4-month reference period. Workers can opt out in writing - many do, in hospitality and logistics. A verbal opt-out carries no legal weight.
The Regulations also set three protections:
- 11 hours minimum rest between shifts
- 24 hours uninterrupted rest each week
- A 20-minute break for shifts exceeding 6 hours
These apply regardless of how overtime is paid.
The NMW Problem
From April 2026, National Minimum Wage rates are:
- Age 21 and over: £12.21 per hour
- Age 18-20: £10.00 per hour
- Age 16-17: £7.55 per hour
- Apprentices: £7.55 per hour
The risk concentrates in salaried roles. A worker on £26,000 a year runs at £13.18 per hour across a 38-hour week - above NMW. At 42 hours per week, the effective rate drops to £11.85. That sits below the £12.21 floor for workers over 21. The salary didn't change. The hours did.
HMRC calculates compliance on actual hours worked. If salaried employees work beyond contracted hours on a regular basis, run the numbers before payroll.
Record-Keeping
The Regulations specify no format for time records. The obligation is to maintain records that allow verification of Working Time compliance. Spreadsheets work. So do scheduling apps and time clocks. HMRC inspectors can request these records at any time. Employers who cannot produce them face fines and back-pay liability.
How Overtime Pay Gets Structured
Most UK employment contracts specify one of four approaches:
- Time and a half (1.5x base rate)
- Double time (2x base rate)
- Time off in lieu (TOIL)
- Overtime absorbed into base salary
All four are lawful. The constraint is the same across all of them: the effective hourly rate across all hours worked must not fall below NMW.
Two Patterns Behind Most Compliance Cases
Most HMRC overtime enforcement cases trace to one of two situations.
Salaried employees whose hours creep upward over months, eroding their effective rate below NMW before anyone notices. And zero-hours or part-time contracts where actual hours, paid hours, and recorded hours diverge. Both produce the same outcome: a payroll error that HMRC finds before the employer does.
Rezano
Rezano tracks contracted hours against actual hours and flags any worker approaching NMW risk before payroll runs - not after an HMRC letter arrives. For teams managing salaried and hourly workers together, that gap visibility is the difference between a payroll correction and a fine.