Overtime Tax Calculator UK 2025–26
Enter your annual salary and overtime amount to see exactly how much you keep after tax and National Insurance. Overtime is taxed at your marginal rate — the same rate as your highest band of regular pay.
How overtime is taxed in the UK
Overtime earnings are subject to income tax and employee National Insurance at your marginal rate — the rate that applies to the highest portion of your total annual income. There is no special “overtime tax rate”; overtime is simply added on top of your regular salary and taxed accordingly.
The marginal rate principle
Because UK income tax is progressive, different portions of your income are taxed at different rates. Your personal allowance (£12,570 in 2025–26) is tax-free. Earnings from £12,570 to £50,270 are taxed at 20% (basic rate). Earnings from £50,270 to £125,140 attract 40% (higher rate). The additional rate of 45% applies above £125,140.
Overtime sits on top of your salary, so if your salary already uses up your basic rate band, your overtime is taxed at the higher rate. This is sometimes surprising, but it is simply the correct application of marginal tax rates to additional income.
PAYE and apparent over-taxation
Under PAYE, tax is deducted each pay period based on projected annual income. If you receive a large overtime payment in a single month, your employer may deduct tax as if you would earn that amount every month. This can look like excessive taxation on your payslip, but HMRC's cumulative PAYE system corrects the position over the rest of the year as your actual annual income becomes clearer.
National Insurance on overtime
Employee Class 1 NI is also due on overtime at your marginal NI rate. Below the upper earnings limit (£50,270/yr), the NI rate is 8%. Above the UEL, NI on overtime drops to 2%. Unlike income tax, there is no NI personal allowance equivalent — the primary threshold is the lower boundary above which NI becomes payable.
Frequently asked questions
Is overtime taxed more than regular pay?
No — overtime is not taxed at a higher rate than regular pay. It is taxed at your marginal rate, which is the rate that applies to the top portion of your total income. If all your earnings including overtime fall within the basic rate band, overtime is taxed at 20% income tax plus 8% employee NI, the same as your regular salary in that band.
Why does my overtime look heavily taxed on my payslip?
HMRC uses a cumulative PAYE system that distributes your annual allowances evenly across pay periods. If you receive overtime in one month but not every month, your employer's payroll system may temporarily deduct more tax than the final annual amount. This is corrected over the rest of the tax year or refunded after year-end if you have overpaid.
What is the marginal tax rate on overtime?
For most basic rate taxpayers (total income £12,570–£50,270), overtime is taxed at 20% income tax and 8% employee NI — a combined 28%, keeping 72%. Higher rate taxpayers (£50,270–£125,140) pay 40% income tax and 2% NI — keeping 58%. Between £100,000 and £125,140, personal allowance tapering creates an effective 62% marginal rate.
Does overtime affect my student loan repayments?
Yes — if your total annual income including overtime exceeds the threshold for your student loan plan, repayments are due on the excess at 9% (Plans 1, 2, 4, 5) or 6% (postgraduate). These repayments further reduce your effective keep rate on overtime above the threshold.
Can I put overtime into a pension to save tax?
Not automatically, but you can increase your pension contributions to offset the overtime income. If your pension scheme uses salary sacrifice, you could arrange to contribute the overtime gross amount and receive the full £1 in your pension for every £1 overtime earned — a significant benefit at higher tax rates. Discuss this with your employer or pension provider.
Related calculators
This calculator provides estimates only. Results are based on the 2025–26 tax year. Credibrate is not a tax adviser. For personalised advice speak to a qualified accountant.