Overtime Tax Calculator UK
See exactly how much of your UK overtime pay you'll actually take home after income tax and National Insurance โ calculated instantly.
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How overtime tax works in the UK.
Overtime is treated as ordinary income under UK tax law. Your employer adds it to your regular pay for that period and applies PAYE income tax and Class 1 National Insurance as normal. There is no special overtime tax rate โ you simply pay whatever rate applies to your combined earnings for that pay period.
The key insight is marginal rate: the first portion of your earnings is protected by your Personal Allowance (ยฃ12,570 per year), then taxed at 20% up to ยฃ50,270, then 40% above that. If your overtime pushes you over a band boundary in a single month, that excess will attract the higher rate โ even if your annual earnings normally sit comfortably in the basic rate band.
๐ก Good news on cumulative PAYE
UK PAYE is calculated on a cumulative basis across the tax year. If you had one unusually high overtime month, your payroll software will recalculate across all months and reduce tax in a later month to compensate โ effectively giving you a refund automatically.
Overtime tax โ your questions answered.
Is overtime taxed differently to regular pay in the UK?
No. Overtime is taxed exactly the same as regular pay โ it is simply added to your earnings for that pay period and PAYE and NI are applied to the combined total. However, if overtime pushes you over the Higher Rate threshold (ยฃ50,270/year), the excess is taxed at 40% rather than 20%.
Why does my overtime feel so heavily taxed?
If you earn overtime in a single month that pushes your combined pay above a tax band boundary, that extra is taxed at the higher rate for that period. HMRC corrects this over the tax year on a cumulative basis โ so if it was a one-off month of high overtime, you should get a small refund of the 'excess' tax automatically at year-end.
Do I pay National Insurance on overtime?
Yes. Overtime is subject to Class 1 NI at 8% (up to the Upper Earnings Limit of ยฃ50,270 per year) and 2% on anything above. The calculation uses the same pay period thresholds as your regular wages.
Can my employer avoid deducting tax on overtime?
No. Your employer is legally required to apply PAYE and NI to all earnings including overtime. There is no special exemption. However, you can reduce the impact by increasing pension contributions via salary sacrifice if your employer supports it.