Shift differential
Also called: night differential, unsocial hours premium
A shift differential is extra pay for working hours that are harder to fill — nights, weekends, public holidays. It is normally either a fixed amount per hour or a percentage on top of the base rate.
What it is for
It buys coverage. If the graveyard shift pays the same as a Tuesday afternoon, it will be filled by whoever has least bargaining power rather than whoever is best at it, and it will churn.
How it is usually set
Either a flat premium per hour, or a percentage uplift. Flat amounts are easier for staff to check on a payslip; percentages scale automatically when base pay changes.
Not the same as overtime
Differential is about which hours were worked. Overtime is about how many. They stack: a night shift that pushes someone past the overtime threshold can attract both, which is where payroll surprises come from.