Overtime Tax Calculator UK 2026/27
See exactly how much of your overtime you keep after Income Tax and National Insurance — calculated instantly with real 2026/27 UK rates.
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Why overtime feels like 40% tax
Overtime is taxed at your marginal rate, not a special rate. The confusion arises because PAYE is calculated on your annualised income each month. If your base salary is £3,000/month and you earn £500 in overtime, your employer's payroll sees your income as £42,000 annualised (£3,500 × 12). If that pushes past a band boundary, the extra is taxed at the higher rate.
Worked example — £3,000/month base + £500 overtime:
| Base month (£3,000) | Overtime month (£3,500) | Extra cost of overtime | |
|---|---|---|---|
| Annualised gross | £36,000 | £42,000 | +£6,000 |
| Income Tax (est.) | £373 | £473 | +£100 |
| NI (est.) | £176 | £216 | +£40 |
| Take-home from extra | — | — | £360 (72% of £500) |
The cumulative PAYE self-correction
UK PAYE is cumulative: your employer recalculates your tax position every month using all pay received since April 6. This means a high overtime month is automatically corrected in quieter months — tax deducted in excess is returned as a reduced deduction in the next pay period.
📊 No action needed from you
If you worked overtime in April and paid too much tax, your June payslip will typically show a lower tax deduction to compensate. You should not need to contact HMRC unless your tax code changes.
The £100k overtime trap
If your base salary is close to £100,000 and overtime pushes your adjusted net income above that threshold, you enter the personal allowance taper zone. For every £2 above £100k, you lose £1 of your £12,570 Personal Allowance. This creates an effective 60% marginal rate between £100k and £125,140.
| Regular salary | Overtime takes you to… | Effective marginal rate on overtime |
|---|---|---|
| £30,000 | £30,001–£50,270 | 28% (20% tax + 8% NI) |
| £40,000 | £40,001–£50,270 | 28% (20% tax + 8% NI) |
| £50,000 | £50,001–£100,000 | 42% (40% tax + 2% NI) |
| £95,000 | £100,001–£125,140 | 60% effective (allowance taper) |
Reduce overtime tax with pension sacrifice
Higher-rate taxpayers keep just 58p from every £1 of overtime. Pension salary sacrifice can flip the economics — putting the taxman's share into your own retirement pot.