How much of my overtime will I actually keep?
Overtime is normally employment earnings, not a separate category with its own tax rate. What you keep depends on your total pay, your marginal Income Tax band, National Insurance and any payroll deductions such as student loans.
Why overtime can appear to be “taxed more”
The extra pay sits on top of your normal pay. If your normal earnings have already filled lower Income Tax bands, the overtime may be taxed at your higher marginal rate. That does not mean HMRC has a special overtime tax rate.
National Insurance on overtime
Overtime is normally included in earnings for Class 1 NI. For most category A employees in 2026/27, the employee rate is 8% in the main band and 2% above the Upper Earnings Limit. NI is calculated by pay period, so the result can differ from a simple annual percentage.
Student loans and overtime
Payroll student-loan deductions are also based on earnings in the pay period. Overtime can push that period's earnings further above your plan threshold and increase the deduction for that payday.
Estimating overtime with NetSlip
For a quick annualised estimate, convert the extra hours into additional gross annual pay and compare the old and new salary in the Pay Rise Calculator. For hourly-to-annual conversions, use Hourly ⇄ Annual.
Related NetSlip tools & guides
FAQs
Is overtime taxed at a special rate in the UK?
No. Overtime is generally added to your employment earnings and taxed through PAYE using the normal Income Tax rules.
Do I pay National Insurance on overtime?
Normally yes. Overtime pay is generally part of earnings for Class 1 National Insurance.
Can overtime increase my student-loan repayment?
Yes. If overtime increases earnings above the relevant payroll threshold for your plan, the deduction for that pay period can increase.