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Annualised Hours

Provide greater employee flexibility, reduce overtime and increase productivity.

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· •Increase Flexibility to Seasonal Demands
· •Reduce Overtime & No. of Temporary Staff
· •Deploy Quickly in Times of High Demand
· •Improve Productivity and Reduce Costs

What are Annualised Hours?

Annualised Hours are an effective way to remove overtime and increase flexible working time. It is a system that many industries have adopted as an alternative to traditional methods where employees are paid hourly, weekly or monthly.

In simple terms, annualised hours system calculates employees’ hours based on a whole year, rather than monthly or weekly. It is an arrangement where an employee works a specific number of hours a year, which can vary from month to month or even week to week.

Annualised Hours Formula

No. of weeks * No. of hours per week = Annual Hours


Typically, annualised hours are based on a 35-40 hour week. For example, a person working a 39-hour week, with annual leave of 5 weeks and 1.8 weeks of public holidays, equals 45.38 working weeks.

Annual Hours = 45.38 weeks x 39 h/per week = 1,770 h


  • Increased flexibility to cope with seasonal demands
  • Cost-effective due to the reduction/elimination of overtime
  • Rapid deployment in times of higher demand
  • Improved productivity, greater customer satisfaction and increased profits
  • Reduction in the number of temporary staff and the associated training costs
  • Higher level of regular and stable pay for employees
  • Greater security for staff as the threat of lay-offs due to business fluctuations is reduced
  • Opportunity for employees to balance work with commitments outside of work
  • Most importantly – Steady income for the employee and fixed costs for the business


  • It can be difficult to accurately estimate future work demands
  • It can happen that employees get paid for the hours that they might not do in the end
  • It is hard to stay in contact with the employees over periods when they are not working
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