What is overtime pay?

In the US, the Fair Labor Standards Act requires overtime at not less than one and a half times the regular rate of pay for hours over 40 in a workweek, for non-exempt employees. Exempt employees, who meet the salary and duties tests, are not owed federal overtime.

In the UK, there is no legal right to extra pay for overtime. GOV.UK says the employee’s average pay for all the hours they work must not fall below the National Minimum Wage, and the contract sets any overtime rate. Separately, workers cannot be made to work more than 48 hours a week on average, normally measured over 17 weeks, unless they choose to opt out. In Canada’s federal jurisdiction, standard hours are eight a day and 40 a week, and overtime is paid at not less than one and a half times the regular rate, or as time off at the same ratio. In Australia, the Fair Work Act says an employer must not ask a full-time employee to work more than 38 hours a week unless the additional hours are reasonable, and the employee can refuse unreasonable hours; overtime rates come from the relevant award or agreement. In India, the labour codes in force since 21 November 2025 set eight hours a day and 48 a week as the standard and require overtime, with the worker’s consent, at twice the ordinary rate of wages.

For the employer, overtime is a budgeting and wellbeing question as well as a legal one. Require approval in advance, record hours accurately for everyone who is owed overtime, and watch for teams where overtime has become permanent: that usually means the plan needs another hire, not more hours from the same people.

Write the overtime rule into the offer letter or contract: whether overtime is paid, at what rate, whether time off in lieu is available and who approves it. This is general information, not legal advice.

Also called: overtime pay, overtime rules, time and a half.