Annualised hours

The contract fixes a yearly total

Annualised hours express contractual working time as a total for the year rather than the same number every week. More hours can be scheduled during busy periods and fewer during quieter ones, while the employee remains on one agreed arrangement.

This differs from flexitime, where the employee usually varies the edges of a day or week within an accounting period. It also differs from overtime, which is work beyond the contracted total or pattern. Acas lists annualised hours as a distinct flexible-working arrangement.

Turn the total into a usable plan

The agreement should state the annual total, year start, normal or guaranteed pattern, notice for scheduled hours and how leave, sickness, starters and leavers affect the balance. If some hours are reserved for demand that cannot be predicted, define how and when the employer can call on them.

Pay may be smoothed across the year if the contract says so, but minimum-wage compliance still needs the correct pay-reference-period and salaried-hours analysis. Use the current minimum-wage hours guidance rather than assuming the annual average settles every month.

Reconcile before the year closes

Track scheduled and actual hours continuously. Review the balance after long absence, a contract change or sustained extra work. Decide in advance how genuine excess or shortfall will be handled without making unlawful deductions or expecting unpaid hours.

Confirm any new annualised arrangement as a contract variation. For Northern Ireland, use the separate flexible-working guidance and check the applicable contract process.