AbstractHigh peak to average power ratio (PAPR) is viewed as a serious limitation of all multi‐carrier systems. In this article, a companding transform with clipping technique is proposed for universal filtered multi‐carrier (UFMC) system. The proposed companding transform successfully reduces the PAPR by expanding the small amplitude signals and compressing the peak amplitude signals. Moreover, the combination of companding and clipping further reduces the PAPR. Besides, the proposed scheme provides more flexibility by properly selecting companding parameters and clipping ratio (CR). Additionally, this article presents the performance evaluation of various nonlinear companding transforms (NCTs) of the UFMC system in terms of PAPR reduction, bit‐error‐rate, and reduced out‐of‐band emissions. Simulation results confirm that the proposed hybrid transform provides superior system performance when compared to other NCTs. The proposed hybrid transform with CR of 1.4 provides superior PAPR diminution of 8.5 dB and net gain of 8.9 dB when compared to other schemes. Finally, the proposed hybrid transform is validated by using wireless‐open access‐research platform over real time channel.