# Pay practice: how UK employers run pay in 2026 > How UK employers run pay in 2026: pay reviews and governance, overtime, shift and on-call pay, allowances and progression, with every base shown. Source: https://lumihr.co.uk/resources/pay Author: David Whitfield (https://lumihr.co.uk/about/david-whitfield) Data: lumi reward benchmark · national · collection window 2026 H1 --- *lumi benchmarks · Pay practice · Collection window 2026 H1 · By David Whitfield* > **Key findings** > - 53.9% of organisations define formal pay ranges for all permanent roles, and 26.2% do so partially (n = 267). ([How do UK employers run and govern their annual pay review?](/research/pay-review-governance-2026)) > - Paid overtime is the common approach, at 71.7% (n = 226, "Not applicable" excluded). Time off in lieu (TOIL) only is rare, at 19.5%. ([How do UK employers pay for overtime, shift work and on-call?](/research/overtime-shift-on-call-2026)) This area covers the practice around pay rather than pay levels: how the annual pay award is set and governed, how overtime, shift work and on-call are paid, which allowances and premiums are paid, and whether pay is differentiated by geography within the UK. lumi does not benchmark base salary levels; a salary survey sits alongside it. Every figure on this page comes from the lumi reward benchmark, with the number of organisations answering shown beside it. The papers below give the full distributions, and the public figures link to one page per metric. The register lists 93 metrics in this area, among them how the pay award is set, geographic pay differentiation within the UK and allowances or premiums currently paid; every one has a public definition in [the metric register](/register). ## Frequently asked questions **How do UK employers run and govern their annual pay review?** In the lumi reward benchmark, 53.9% of organisations define formal pay ranges for all permanent roles, and 26.2% do so partially (n = 267). **How do UK employers pay for overtime, shift work and on-call?** In the lumi reward benchmark, paid overtime is the common approach, at 71.7% (n = 226, "Not applicable" excluded). Time off in lieu (TOIL) only is rare, at 19.5%. **What is typical overtime and on-call pay in the UK?** In the lumi reward benchmark, 71.7% of UK organisations pay overtime, 19.5% give time off in lieu (TOIL) only and 8.8% offer neither (n = 226), and 96.8% pay shift premiums for unsocial hours (n = 218). On-call allowances are most often paid per day (34.2%, n = 149), with per call-out only, with no retainer, the alternative at 30.9%. The minimum wage is not due for standby at home, and on-call allowances do not count towards it unless consolidated. ## Related - [All resources](/resources) — every paper, guide and template, filterable by topic. - [How the numbers are made](/methodology) — collection, the floor of three, and how positions are read. - [Who is in the sample](/sample) — the organisations behind every figure, by sector and by size. ## What the research says ### How do UK employers pay for overtime, shift work and on-call? - Paid overtime is the common approach, at 71.7% (n = 226, "Not applicable" excluded). Time off in lieu (TOIL) only is rare, at 19.5%. - Shift premiums for unsocial hours are paid by 96.8% of organisations answering (n = 218, "Not applicable" excluded). - "No" is the common answer on paying hourly workers for shifts cancelled at short notice, at 46.1% (n = 219). - For zero- and low-hours workers, "Neither" is the common answer on reasonable notice of shifts and short-notice cancellation payments, at 33.1% (n = 121). - "Per day" is the common basis for paying an on-call allowance, at 34.2% (n = 149). "Per call-out only (no retainer)" is the alternative, at 30.9%. - The common standby structure is "Percentage of salary" for IT / Technology (22.7%, n = 88) and "Flat cash per week (retainer)" for Engineering & Maintenance (31.2%, n = 80). - 46.3% pay one standby rate for every period (n = 95). Weekend nights are the period most often given a higher rate, at 43.2%. Read the paper: https://lumihr.co.uk/research/overtime-shift-on-call-2026 ### How do UK employers run and govern their annual pay review? - 53.9% of organisations define formal pay ranges for all permanent roles, and 26.2% do so partially (n = 267). - 46.1% link their pay ranges to a documented job evaluation or grading framework (n = 267). - 84.1% run their main pay review cycle annually (n = 251). - 45.0% say pay increases are not differentiated by performance rating, answering "flat or near-flat" (n = 258). 17.2% use a full merit matrix (n = 256). - 45.7% do not review pay decisions for fairness before implementation (n = 267), and 65.7% do not put reward changes through an equality impact assessment (n = 265). - Final sign-off on the annual pay decision sits with the HRD in 25.3% of organisations, the CEO/MD in 23.0% and a Remuneration Committee in 21.5% (n = 265). - 63.3% run their pay review cycles on spreadsheets (n = 264). Read the paper: https://lumihr.co.uk/research/pay-review-governance-2026 ## The public figures - [Allowances reviewed within reward governance](https://lumihr.co.uk/metrics/allowances-reviewed-within-reward-governance): 39.9% have allowances reviewed within reward governance in place; a further 34.7% have it partly in place (n = 248) - [Allowances differentiation by role level](https://lumihr.co.uk/metrics/allowances-differentiation-by-role-level): 65.3% have allowances differentiation by role level in place (n = 242) - [Location of remote employees permitted to work from](https://lumihr.co.uk/metrics/location-of-remote-employees-permitted-to-work-from): 60.1% answered “Anywhere in the UK” on location of remote employees permitted to work from (n = 208) - [Home-working expenses typically reimbursed or covered](https://lumihr.co.uk/metrics/home-working-expenses-typically-reimbursed-or-covered): 70.2% selected “IT equipment (laptop, screen, kit)” for home-working expenses typically reimbursed or covered (n = 262) - [How often employees are typically paid](https://lumihr.co.uk/metrics/how-often-employees-are-typically-paid): 77.2% answered “Monthly” on how often employees are typically paid (n = 224) - [Shift premiums paid for unsocial hours](https://lumihr.co.uk/metrics/shift-premiums-paid-for-unsocial-hours): 97.7% have shift premiums paid for unsocial hours in place (n = 216) - [Remote working base pay treatment](https://lumihr.co.uk/metrics/remote-working-base-pay-treatment): 65.3% answered “Base pay is protected” on remote working base pay treatment (n = 121) - [Location typically used to determine base pay for remote roles](https://lumihr.co.uk/metrics/location-typically-used-to-determine-base-pay-for-remote-roles): 57% answered “National pay rate (location-agnostic)” on location typically used to determine base pay for remote roles (n = 223) - [How remote roles are benchmarked](https://lumihr.co.uk/metrics/how-remote-roles-are-benchmarked): 56.7% answered “Against national market rates” on how remote roles are benchmarked (n = 217) - [Remote-role pay decisions reviewed for consistency](https://lumihr.co.uk/metrics/remote-role-pay-decisions-reviewed-for-consistency): 40.3% answered “No” on remote-role pay decisions reviewed for consistency (n = 211) - [Pay premiums or discounts for remote roles](https://lumihr.co.uk/metrics/pay-premiums-or-discounts-for-remote-roles): 85.5% answered “No specific premiums or discounts” on pay premiums or discounts for remote roles (n = 220) - [Top performers checked as above market median](https://lumihr.co.uk/metrics/top-performers-checked-as-above-market-median): 72.3% answered “No” on top performers checked as above market median (n = 267) - [Hourly workers paid if scheduled shifts are cancelled](https://lumihr.co.uk/metrics/hourly-workers-paid-if-scheduled-shifts-are-cancelled): 53.5% have hourly workers paid if scheduled shifts are cancelled in place (n = 217) - [Guaranteed minimum hours (hourly-paid)](https://lumihr.co.uk/metrics/guaranteed-minimum-hours-hourly-paid): 51.9% have guaranteed minimum hours (hourly-paid) in place; a further 38.5% have it partly in place (n = 239) - [Target market position on base pay](https://lumihr.co.uk/metrics/target-market-position-on-base-pay): 100% have target market position on base pay in place (n = 223) - [Sources used for external pay benchmarks](https://lumihr.co.uk/metrics/sources-used-for-external-pay-benchmarks): 77.2% selected “Consultancy salary surveys (e.g., Mercer/WTW/Aon, Croner, Agenda Consulting)” for sources used for external pay benchmarks (n = 267) - [Overtime paid](https://lumihr.co.uk/metrics/overtime-paid): 91.1% have overtime paid in place (n = 224) - [Allowances or premiums currently paid](https://lumihr.co.uk/metrics/allowances-or-premiums-currently-paid): 48.9% selected “Acting-up allowance” for allowances or premiums currently paid (n = 262) - [Minimum hours paid per call-out](https://lumihr.co.uk/metrics/minimum-hours-paid-per-call-out): 87.2% have minimum hours paid per call-out in place (n = 148) - [Allowances consolidated into base pay at any point](https://lumihr.co.uk/metrics/allowances-consolidated-into-base-pay-at-any-point): 10% have allowances consolidated into base pay at any point in place; a further 40.2% have it partly in place (n = 261) - [Allowances included in holiday pay](https://lumihr.co.uk/metrics/allowances-included-in-holiday-pay): 82.8% have allowances included in holiday pay in place (n = 256) - [Annual pay budget setting factors](https://lumihr.co.uk/metrics/annual-pay-budget-setting-factors): 86.1% selected “Affordability / budget constraints” for annual pay budget setting factors (n = 267) - [Pay increases differentiated by performance rating](https://lumihr.co.uk/metrics/pay-increases-differentiated-by-performance-rating): 44.7% answered “No – flat or near-flat” on pay increases differentiated by performance rating (n = 257) - [Pay-for-skills maturity](https://lumihr.co.uk/metrics/pay-for-skills-maturity): 24.1% have pay-for-skills maturity in place; a further 40.6% have it partly in place (n = 249) - [Workforce cost as % of income (revenue)](https://lumihr.co.uk/metrics/workforce-cost-as-of-income-revenue): The median workforce cost as % of income (revenue) is 35% (n = 247) - [Pay review cycle frequency](https://lumihr.co.uk/metrics/pay-review-cycle-frequency): 100% have pay review cycle frequency in place (n = 236) - [Salary increase budget as % of payroll](https://lumihr.co.uk/metrics/salary-increase-budget-as-of-payroll): The median salary increase budget as % of payroll is 3.35% (n = 248) - [External pay and benefits benchmarking approach](https://lumihr.co.uk/metrics/external-pay-and-benefits-benchmarking-approach): 55.3% have external pay and benefits benchmarking approach in place; a further 26% have it partly in place (n = 262) - [Job-evaluation / levelling coverage](https://lumihr.co.uk/metrics/job-evaluation-levelling-coverage): 76.8% have job-evaluation / levelling coverage in place (n = 263) - [Advance notice given for shift patterns](https://lumihr.co.uk/metrics/advance-notice-given-for-shift-patterns): 38.4% answered “2 or more weeks” on advance notice given for shift patterns (n = 211) - [AI-skills pay premium](https://lumihr.co.uk/metrics/ai-skills-pay-premium): 92.5% answered “No” on AI-skills pay premium (n = 265) - [Typical payment per week of IT / Technology standby cover](https://lumihr.co.uk/metrics/typical-payment-per-week-of-it-technology-standby-cover): 30.1% answered “No standby allowance paid” on typical payment per week of IT / Technology standby cover (n = 83) - [Typical payment per week of Engineering & Maintenance standby cover](https://lumihr.co.uk/metrics/typical-payment-per-week-of-engineering-maintenance-standby-cover): 27% answered “No standby allowance paid” on typical payment per week of Engineering & Maintenance standby cover (n = 74) - [Typical standby payment for one weeknight of cover](https://lumihr.co.uk/metrics/typical-standby-payment-for-one-weeknight-of-cover): 32.1% answered “No standby allowance paid” on typical standby payment for one weeknight of cover (n = 131) - [Target pay position in range for fully competent performers](https://lumihr.co.uk/metrics/target-pay-position-in-range-for-fully-competent-performers): 60.1% answered “At midpoint (100%)” on target pay position in range for fully competent performers (n = 158) - [Formal merit matrix use](https://lumihr.co.uk/metrics/formal-merit-matrix-use): 51.6% answered “No” on formal merit matrix use (n = 254) - [Shift notice and cancellation pay for zero-hours workers](https://lumihr.co.uk/metrics/shift-notice-and-cancellation-pay-for-zero-hours-workers): 33.3% answered “Neither” on shift notice and cancellation pay for zero-hours workers (n = 120) - [Guaranteed-hours offers for zero- and low-hours workers](https://lumihr.co.uk/metrics/guaranteed-hours-offers-for-zero-and-low-hours-workers): 44.5% answered “No” on guaranteed-hours offers for zero- and low-hours workers (n = 119) - [Real Living Wage position](https://lumihr.co.uk/metrics/real-living-wage-position): 37.3% answered “At/above RLW – not accredited” on real Living Wage position (n = 263) - [Starting-salary positioning policy](https://lumihr.co.uk/metrics/starting-salary-positioning-policy): 57.1% answered “Below midpoint (minimum to mid)” on starting-salary positioning policy (n = 212) - [Holiday pay method for irregular hours](https://lumihr.co.uk/metrics/holiday-pay-method-for-irregular-hours): 52.5% answered “Accrued and paid when taken (52-week average pay)” on holiday pay method for irregular hours (n = 217) - [Typical promotion pay increase policy](https://lumihr.co.uk/metrics/typical-promotion-pay-increase-policy): 38.3% answered “Fully discretionary” on typical promotion pay increase policy (n = 266) - [Formal counter-offer policy](https://lumihr.co.uk/metrics/formal-counter-offer-policy): 54.3% answered “No formal policy (handled ad hoc)” on formal counter-offer policy (n = 265) - [Geographic pay differentiation within the UK](https://lumihr.co.uk/metrics/geographic-pay-differentiation-within-the-uk): 45.9% answered “National single structure” on geographic pay differentiation within the UK (n = 266) - [Policy for pay at or above range maximum](https://lumihr.co.uk/metrics/policy-for-pay-at-or-above-range-maximum): 50.2% answered “Frozen until range moves” on policy for pay at or above range maximum (n = 211) - [Line-manager pay-decision training](https://lumihr.co.uk/metrics/line-manager-pay-decision-training): 44.9% answered “Guidance pack only” on line-manager pay-decision training (n = 263) - [Apprentice/graduate pay progression framework](https://lumihr.co.uk/metrics/apprentice-graduate-pay-progression-framework): 50.2% answered “Ad hoc” on apprentice/graduate pay progression framework (n = 209) - [Acting-up pay policy](https://lumihr.co.uk/metrics/acting-up-pay-policy): 45.5% answered “Formal allowance or uplift policy” on acting-up pay policy (n = 264) - [Agency worker benefits beyond the AWR minimum](https://lumihr.co.uk/metrics/agency-worker-benefits-beyond-the-awr-minimum): 67.8% answered “Statutory only” on agency worker benefits beyond the AWR minimum (n = 199) - [Seasonal-peak premium or retention bonus](https://lumihr.co.uk/metrics/seasonal-peak-premium-or-retention-bonus): 31% answered “Peak premium” on seasonal-peak premium or retention bonus (n = 100) ## Guides and templates - [How to design on-call and standby pay](https://lumihr.co.uk/guides/how-to-design-on-call-standby-pay) - [How to run an annual pay review: process and governance](https://lumihr.co.uk/guides/how-to-run-annual-pay-review)