Common Myths About Hourly Pay and Overtime in the UK

Understanding your salary is more than just knowing the annual figure on your contract. Many employees fall for myths about how hourly rates, overtime, and pay scales work. This article uses the latest UK data from the Office for National Statistics (ONS) and GOV.UK to set the record straight.

Myth 1: Overtime is always paid at time-and-a-half

A widespread belief is that any work beyond 40 hours a week must be paid at 1.5 times your normal hourly rate. In reality, UK law only requires that you are paid at least the National Minimum Wage for all hours worked. There is no statutory right to a premium for overtime. Many professional and managerial roles include overtime in the annual salary, meaning you get no extra pay for extra hours. According to ONS ASHE 2025, median weekly earnings for full-time employees were £766.60, but that figure includes both basic pay and any overtime payments. Always check your contract to see how overtime is treated.

Myth 2: Your hourly rate is simply your annual salary divided by 40 hours and 52 weeks

This myth leads to confusion when comparing job offers. The standard full-time working week in the UK is often 37.5 hours, not 40. The ONS defines full-time as more than 30 paid hours per week (or 25 for teaching). Using the median annual salary of £39,039 and median hourly pay of £19.67 from ONS ASHE 2025, the implied working week is about 37.5 hours. If you divide £39,039 by 40 hours × 52 weeks, you get £18.77 per hour – a figure that doesn’t match the official median. Always use your actual contracted hours. Our hourly calculator can help you convert accurately.

Myth 3: The National Living Wage is the same as a living wage

The government’s National Living Wage (NLW) is a legal minimum for employees aged 21 and over. From April 2025, it is £12.21 per hour. However, the real Living Wage, calculated by the Living Wage Foundation, is higher and voluntary. Many employers, especially in London, pay the real Living Wage to reflect the true cost of living. The NLW is a floor, not a target. When evaluating a salary, consider whether it meets the real Living Wage in your area.

Myth 4: London weighting always adds a fixed percentage to your salary

London weighting (or Higher Cost Area Supplements) varies widely. For NHS staff, HCAS is calculated as a percentage of basic salary (5%–20%) with minimum and maximum payments, as shown in the NHS Employers pay scales for 2026/27. Some employers give a flat amount, others a percentage capped at a certain figure. It’s not a universal 20% uplift. Always check the specific terms of your offer.

How to convert hourly rates to annual salary correctly

A simple rule of thumb is: annual salary ≈ hourly rate × hours per week × 52. For a 37.5-hour week at the NLW of £12.21, that gives about £23,809.50 per year. But remember, this assumes no unpaid overtime, no bonuses, and no salary sacrifice. If your role includes guaranteed overtime, your actual annual earnings may be higher. Use our Hourly to Salary tool to run your own numbers.

The importance of understanding your contract

Your employment contract should state your basic annual salary, your contracted weekly hours, and how overtime is paid. If it says “annual salary includes overtime”, your hourly rate for extra hours may be lower than you expect. The ONS data shows that median hourly pay for full-time employees (excluding overtime) was £19.67 in April 2025, but many workers earn more or less depending on their industry and region.

Final thoughts

Don’t let myths about hourly pay and overtime cost you money. Use official sources like ONS ASHE and GOV.UK to benchmark your salary. For more insights, browse our salary data and topics pages. And always read the small print in your contract.