Overtime Pay Calculator

Overtime pay is taxed on top of your existing salary, not on its own separate, lower rate — which means the actual hourly rate you keep after tax and National Insurance can be noticeably lower than the headline overtime rate advertised, particularly once your total income for the year climbs into a higher tax band. This calculator works out exactly what your overtime hours are genuinely worth after deductions, using the same marginal approach HMRC itself applies.

Why Overtime Can Feel Like a Pay Cut Per Hour

An overtime rate quoted as “time and a half” or “double time” describes the gross hourly rate, not what you actually keep — and once tax and National Insurance are deducted, the net hourly value can feel disappointingly modest compared with the headline figure that motivated taking the extra hours in the first place. This calculator shows a specific net-per-hour figure precisely because this is often the number that matters most when deciding whether extra hours are genuinely worth it, rather than the more attractive-sounding gross rate alone.

Comparing the net-per-hour figure against your normal hourly rate, rather than only comparing it to the enhanced gross overtime rate, gives a more honest sense of the genuine trade-off — the extra hours may still be worthwhile, but it is worth making that judgement based on the real, after-tax number rather than the more flattering headline rate alone.

The Threshold Overtime Quietly Pushes You Over

Overtime is frequently the specific extra income that tips someone over the £50,270 higher-rate threshold for the year, even when their base salary alone would have stayed comfortably under it — since overtime adds directly on top of whatever salary is already there. This calculator checks your combined salary and overtime together, not your overtime pay in isolation, precisely because whether overtime gets taxed at 20% or 40% genuinely depends on where your total income for the year lands, not on some separate, fixed overtime tax rate.

This is worth being genuinely aware of before assuming all overtime hours are taxed at the same rate throughout the year — the first hours of overtime in a tax year, before the threshold is crossed, keep considerably more per hour than later hours worked once the higher rate has kicked in, even at an identical gross hourly overtime rate throughout.

Seeing the Gross-to-Net Gap in Practice

A £47,000 salary with 150 hours of overtime at £22.50 an hour adds £3,375 in gross overtime pay, taking total annual income to £50,375 — just over the £50,270 higher-rate threshold. Tax and National Insurance on that overtime come to roughly £960, leaving £2,415 net, an effective deduction rate of about 28% blended across the overtime portion. That works out to roughly £16.10 an hour actually kept, noticeably less than the £22.50 gross rate that likely made the overtime look attractive in the first place.

Why This Isn’t the Same as a Bonus

Overtime and a one-off bonus are taxed using the same underlying marginal principle, but they behave differently in practice: a bonus is typically a single, larger lump sum landing in one pay period, while overtime tends to accumulate gradually across many smaller amounts throughout the year. This means overtime is often less likely to single-handedly push you into a new tax band in any one pay period, but the cumulative effect across a full year of regular overtime can still meaningfully add up, particularly for anyone whose base salary already sits close to the £50,270 threshold before any overtime is even added. If a lump sum bonus, rather than ongoing overtime, is what you are trying to work out, our Bonus Tax Calculator covers that specific scenario.

What Changes If You’re Already Near the Top of a Band

The closer your base salary already sits to a tax band threshold, the more of any additional overtime gets taxed at the higher rate rather than the lower one — someone on a £48,000 salary taking on overtime will see the first couple of thousand pounds taxed at the basic rate before crossing into higher-rate tax on the rest, while someone on a £45,000 salary has more room before the same thing happens. This is worth being aware of specifically toward the end of a tax year, when a base salary has already accumulated most of its annual total and further overtime is more likely to land entirely within the higher band, compared with overtime taken earlier in the same tax year. This calculator reflects this precisely by calculating tax on your combined total, not applying a single flat rate to the overtime portion alone. Our Hourly Wage Tax Calculator is useful for working out your base salary’s own take-home figure before adding overtime into the picture.

Frequently Asked Questions

Important Information

This calculator provides an estimate based on standard 2026/27 PAYE rates for general information purposes only and does not constitute tax advice. It assumes a standard tax code. For advice specific to your circumstances, consult HMRC or a qualified accountant. See our Disclaimer for further information.