When it comes to contracted hours and actual hours, the difference is simple: contracted hours are the minimum number of hours an employer must provide and pay for under an employment contract, while actual hours are the hours an employee physically works, which may be higher or lower in any given week. Employees and employers who are trying to understand where they stand on pay, scheduling, and the law often need that distinction made clear.
There are many employees working significantly more or less than the number of hours shown in their contract, and many employers managing rotas, overtime, and time records, who need to know what that means in practice. This guide explains how contracted and actual hours differ, how overtime, sick leave, and holiday pay can affect them, what the working time rules require, which jobs may be treated differently, and how to track hours worked accurately so pay and legal compliance stay on track.
Understanding the difference
Typically, contracted hours are set out in a contract of employment issued at the start of a new role between an employer and employee. This contract will include information on how, when and where these contracted hours are to be worked, including any requirements around overtime, holiday and sick leave.
During the course of doing their job, employees may find that they work more or less than their contracted hours in a given week. It’s the sum of those hours actually worked that would be referred to as ‘actual hours’.
Read on to find out more about contracted hours, why they might vary from the actual hours worked and the working hours regulations that employers and employees should be aware of.
What are contracted hours?
Contracted hours are the agreed or guaranteed working hours set out in the employment agreement that an employer is contractually obliged to provide work for and pay an employee for. On the flip side, contracted hours are also the number of hours that an employee must be available for, and work in a normal working week, unless other arrangements have been made such as a shift swap with a colleague. If your employer cannot give the minimum hours agreed, they are required to pay you in lieu. They cannot reduce pay for fewer hours unless the employee agrees or a flexibility clause allows it.
This number of hours should explicitly state in the employee’s contract where one exists, but the number of actual hours worked won’t always match the contracted hours due to holidays and sickness.
For example, if an employee’s contract of employment states they will work a 35-hour week, the employer must provide the opportunity for them to complete those hours unless the contract includes a flexibility clause. If they cannot, they will be in breach of the contract. Similarly, if an employee doesn’t work their full 35 hours, they could be in breach of their employment contract.
What are actual hours?
If contracted hours are the minimum number of hours that an employer is required to pay an employee, contracted and actual hours distinguish that minimum from the hours that the employee has physically worked in a given time period, regardless of the type of activities and if the hours worked are different to any usual shift pattern that may exist.
Factors that affect the number of actual hours worked include overtime, annual leave, sick leave or other types of absences and additional workload. Employees may work more or fewer hours than planned due to various factors such as business needs or absences.
In regards to overtime hours, some companies include mandatory overtime in their contracts of employment which obligates the employer to work extra hours in certain situations. Most of the time however, overtime is voluntary and is usually incentivised to promote the take up of additional hours by employees. If a manager requests extra time, whether it is paid will depend on the contract and pay arrangements.
For example, if an employee contracted hours at 35 hours per week but 5 extra hours have been worked, then the actual working hours could be 40 hours for that week. For hourly-paid workers, pay is tied to the hours actually worked, and any gap between contracted hours and actual hours can affect the employee’s salary.
The way actual hours are calculated and recorded will vary between employers. Some may use a clocking system, others will operate manual timesheets, but whatever time the employee has spent working for the company, this must be paid at the agreed rate set out in the contract of employment. Employers also need accurate data and time tracking so pay for actual hours worked does not fall below minimum wage.
What about zero hours contracts?
The term ‘zero hours contract’ describes a type of employment contract between an employer and employer where there is no minimum number of working hours that the employer is required to offer or pay the employee for.
In this scenario, the contract differs from a typical employment contract in that the employee will only be paid for the actual hours worked, and they are not obliged to accept any hours offered to them.
These types of contacts are common in hospitality, gigging, delivery driving, warehouse and care industries where demand for services can rise and fall. A zero-hours contract gives both employers and employees flexibility to boost or reduce their staffing levels or income at short notice.
Note, that major changes are coming in 2027 to zero hours contracts under the Employment Rights Act 2025. This will require employers to provide guaranteed hours after a reference period (expected to be 12 weeks). Employers must provide advance notice of shifts and will be expected to compensate employees if shifts are changed or cancelled at short notice.
How does holiday and sick pay affect things?
The actual hours worked in any given time period will be affected by absence or additional workload. Absence due to sickness or annual leave will reduce the number of actual hours worked, whereas any overtime worked will increase the number of actual hours worked.
In most organisations, annual leave is counted as paid time off, so in those scenarios, the number of hours the employee is paid for wouldn’t be impacted by taking a day off.
Sick leave payments vary between employers, with some choosing to offer this benefit after a probationary period is complete for example. It’s important therefore that employees check their terms of employment as to whether they are eligible for company sick pay. If they are, then they will be paid for some or all of the time they are off due to being unwell.
In the absence of a company sick pay policy, employees are entitled to receive £123.25 per week Statutory Sick Pay (SSP) from the government if they’re too ill to work. This amount is paid by the employer for up to 28 weeks once certain criteria are met.
What does the law say about hours worked?
There are strict rules on the number of hours that employees can work in any given week based on their age and type of work that they are employed to do.
When working out the number of hours of overtime available or creating shift patterns for employees, it’s important that employers pay attention to the rules below and any specific guidelines relating to the industry they operate in.
Equally, employees are required to adhere to these requirements too, so if they work more than one job, it will be their responsibility to ensure that they are not overworking.
The working time regulations law states:
Nobody should work more than 48 hours a week on average. The average is usually calculated over 17 weeks unless they do a job not covered by the law on working hours
Individuals under 18 can’t work for more than 8 hours a day or 40 hours a week.
If the hours you work each week vary, you may wonder how to keep track of what your working average is. To calculate an individual’s weekly working hours you should take the total number of hours worked over a 17 week period and divide the total by 17 to provide the average hours worked.
Working more than the average
Employers can ask employees over 18 years old to work more than 48 hours on average per week but in order to do this, the employee must ‘opt out’ of the 48-hour regulations, and some still choose or are asked to work long hours after opting out.
Employees can also refuse requests by their employer to work more than the 48-hour average, and they cannot be sacked or penalised for this. If a manager requests extra hours, whether they must be worked depends on the contract and any overtime terms, and salaried employees may not receive extra pay even when they work beyond contracted hours.
Due to the nature of their roles, air transport jobs, lorry, bus and coach drivers and crew, river and lake transport and seafaring jobs all have their own working time laws and other industries also operate with allowed exceptions to the rules.
For full information on what the law says about maximum working hours in a week, visit gov.uk
Exceptions & variations to working hours laws
Due to the specialised nature of some roles, their location, need to be available at short notice and manage emergency situations or being independent workers, there are some roles that are exempt or have flexibility from regular working time regulation law.
In practice, this means that workers in certain roles will have a higher number of actual hours than their contracted hours and may also exceed the recommended working week averages on occasion without penalty.
The jobs below do not have to follow all of the regulations:
Emergency responders including ambulance workers and firefighters and prison staff are covered except for in emergencies.
Off-shore workers have a working time limit over 52 weeks instead of 17.
Armed forces, police or civil protection services are excused in emergency situations
Flexibility is also offered in the following circumstances but in all cases, workers must ensure they take their required breaks and have sufficient time off between shifts.
When shift workers change a shift pattern
Workers that travel a lot between different locations such as sales people and corporate account managers
Roles where employees are needed to work longer hours to provide a continuity of service or production such as, in agriculture roles, hospitals, postal services, research and development etc.
Adult domestic servants in private homes and people that are in charge of their own hours such as company directors and the self-employed are not covered by working time regulations but should still ensure that regulated breaks are taken.
Keeping track of actual hours worked
Whether working patterns are fairly standard or tend to vary a lot at your place of work, having a reliable way to monitor and keep track of hours worked is crucial. Knowing the actual hours worked is vital to both employers and employees to ensure that employees are paid correctly when their contracted hours differ from the actual hours worked.
Options for logging hours worked
Mobile apps
Biometric clock-in
Pen and paper
Time clocks.
Browser plug-ins and URL tracking
Pen and paper
Even in today’s digitalised society, good old fashioned pen and paper has its place when tracking employee hours. It can be a particular benefit of working in areas with poor internet connectivity, as a manual log of hours can be referred to and uploaded to relevant software when back online.
To make working out the hours worked as simple and time-efficient as possible, it usually makes sense to load employee paper submissions into an excel spreadsheet as the very minimum. The figures can then be exported to the payroll system and prevent manual calculations.
Mobile apps
There are lots of mobile apps available to track actual time worked. Clockify for example allows employees to track their time spent on any given project or shift work and assign it to clients which may be helpful for project-based roles. Apps, in general, are also great at offering a reminder to employees to log their hours if they have been inactive for a long period of time – great for when hours need to be submitted in time for the payroll run.
Biometric
Not just something from the movies, biometric identification uses fingerprint or facial features to recognize an employee’s identity. This is a sure fire way to ensure individuals get credit for the work they’re doing as it makes the process of logging time for somebody else very hard. The downside of this option is that it could be an expensive way to track employee hours.
Browser plug-ins and URL trackers
If your organisation conducts most of its work in front of a computer, then URL based clock tools are a great way to track if employees are online when they say they are. They are also useful for tracking time spent against specific projects or clients as they can be started and stopped at will. To verify how your employees are using their working time, online time clocking tools can also track URLs visited so you can really see just how much time is spent on facebook.
Time clocks
This one might conjure up images of a by-gone era but a clocking in and out station is still used in many roles up and down the country. Having a station where employees record their time as they enter and leave their shifts can be an efficient way to ensure shifts are logged at the time they take place. This prevents having to rely on employees remembering the hours they worked after the event.
This type of approach can be managed by apps, tablets or kiosks using barcodes, ID numbers or pins that give each employee a unique identifier which is linked to the payroll system so you can see when they have worked and pay them accordingly.
Benefits of tracking hours worked
As outlined above, some roles and industries mean that employees just have to work when they are required, but for a larger proportion of the population in regular roles, keeping track of where their time is being worked helps support payroll, compliance, and employee rights when contracted hours and actual hours do not match, including for salaried employees that will be paid a fixed sum regardless of hours worked.
Helps to make better staffing decisions
Help staff to take the time off that they need
Ensure payroll is correct
Workout profitability by client or business area by comparing salary costs with revenue generated
Ensure working time regulations are being met
Helps determine when an employer fails to provide paid contracted hours because of low work volume; employers must pay for contracted hours regardless of work volume
Good records support discussions with a manager or hr department and may be needed if unpaid hours or missing contracted pay lead to an employment tribunal claim, other formal action, or a breach-of-contract claim if an employee is unpaid
Summary
We hope this article has cleared up any confusion between contracted hours vs actual hours.
To recap:
Contracted hours are the minimum hours employers are required to provide and pay for, or the threshold below which staff should not work fewer hours unless the contract says when contracted hours can be changed through reduced hours.
Actual hours are the number of hours actually completed in a given week, and they may be fewer hours, work fewer hours than agreed, or include extra hours above contract.
Short time working or short term working can mean temporary short time working hours where staff work fewer hours for business needs, but the contract must allow this or the employee must agree.
Hours worked are regulated by working time regulation laws but there are exceptions to the 48 hours over a 17 week average for certain industries and specialist roles.
Hours worked can be tracked in a variety of ways but specialist time logging software can make keeping track of employees’ actual time worked easier to manage and export for accurate payroll records and payments.
When it comes to contracted hours and actual hours, the difference is simple: contracted hours are the minimum number of hours an employer must provide and pay for under an employment contract, while actual hours are the hours an employee physically works, which may be higher or lower in any given week. Employees and employers who are trying to understand where they stand on pay, scheduling, and the law often need that distinction made clear.
There are many employees working significantly more or less than the number of hours shown in their contract, and many employers managing rotas, overtime, and time records, who need to know what that means in practice. This guide explains how contracted and actual hours differ, how overtime, sick leave, and holiday pay can affect them, what the working time rules require, which jobs may be treated differently, and how to track hours worked accurately so pay and legal compliance stay on track.
The term ‘zero hours contract’ describes a type of employment contract between an employer and employer where there is no minimum number of working hours that the employer is required to offer or pay the employee for.
In this scenario, the contract differs from a typical employment contract in that the employee will only be paid for the actual hours worked, and they are not obliged to accept any hours offered to them.
These types of contacts are common in hospitality, gigging, delivery driving, warehouse and care industries where demand for services can rise and fall. A zero-hours contract gives both employers and employees flexibility to boost or reduce their staffing levels or income at short notice.
Note, that major changes are coming in 2027 to zero hours contracts under the Employment Rights Act 2025. This will require employers to provide guaranteed hours after a reference period (expected to be 12 weeks). Employers must provide advance notice of shifts and will be expected to compensate employees if shifts are changed or cancelled at short notice.
Whether working patterns are fairly standard or tend to vary a lot at your place of work, having a reliable way to monitor and keep track of hours worked is crucial. Knowing the actual hours worked is vital to both employers and employees to ensure that employees are paid correctly when their contracted hours differ from the actual hours worked.
Options for logging hours worked
