UK pay guide
How much tax do you pay on overtime in the UK?
Overtime is normally added to your employment pay and processed through PAYE. There is no separate overtime tax rate, but the extra pay can fall into a higher tax or National Insurance band.
In short
What you keep from overtime depends on your total pay, tax code, National Insurance band, pension arrangement and student-loan deductions—not simply the overtime multiplier in your contract.
Why one overtime payslip can look heavily taxed
PAYE works through payroll, and National Insurance is usually calculated for each pay period. A month with unusual overtime may put part of that month's pay above a threshold, even where the annual picture feels less dramatic.
Pensions and overtime
Some employers include overtime in pensionable pay and some do not. Salary sacrifice can change the pay used for tax and National Insurance calculations, so check the pension scheme rules.
Regular overtime versus a one-off shift
For regular weekly overtime, an annual estimate is useful for planning. For one unusual payment, a payslip estimate is often more useful because NI and PAYE are applied to the actual pay period.
Use the UK overtime calculator for regular overtime, the bonus calculator for a one-off payment and the payslip calculator for one pay period. Official rules are set out in HMRC's PAYE guidance.