Guide
Overtime pay: rates, tax and what an extra shift leaves you
An overtime rate tells you the gross price of your paid hours. To decide whether a shift is worth doing, also count deductions, extra costs and the time the shift takes.
Quick answer
Use the overtime rate in your contract, including any agreed premium. Gross overtime is that rate times paid hours. There is no special universal overtime tax rate: the extra pay follows normal employment-tax rules, with NI and loan deductions affected by payment timing.
On this page
Your contract determines the overtime rate
There is no automatic UK right to a time-and-a-half premium. The applicable terms determine which hours are overtime, whether they must be authorised and what they pay. Minimum-wage obligations still apply under their own rules.
Time-and-a-half means 1.5 times the basic hourly rate: £20 × 1.5 = £30. Five paid hours then give £150 gross. Double time at the same basic rate would be £40 an hour. These are arithmetic conventions, not rates everyone is entitled to receive.
Part-time overtime premiums may begin only after the relevant full-time-hours threshold under the terms. Check the comparator and any applicable agreement. A salaried hourly equivalent is a useful starting point, but the employer may have a specific contractual overtime divisor.
Find the hourly rate behind the overtime
An overtime multiplier needs a base rate. Convert your salary using your contracted hours.
Turn recurring shifts into the right annual total
Suppose you work one extra five-hour shift at £30 an hour for 40 weeks in the tax year. Extra gross is £30 × 5 × 40 = £6,000, for 200 paid hours.
The Extra Pay calculator's overtime mode accepts the final hourly rate or a basic rate and multiplier. You can enter a tax-year shift total or shifts per week/month over the periods actually worked. Count only the extra pay not already included in the annual baseline.
If your rates differ between weekdays, nights and Sundays, use the optional second overtime line with its own rate, hours and tax-year shift count. More complex arrangements can use a confirmed combined gross total. Do not assume every paid hour receives the highest premium.
A worked annual take-home example
Assume £30,000 baseline salary in England in 2026/27, standard allowance, employee NI category A, no pension or student loans, and no benefit effects. Add the £6,000 regular annual overtime above, giving £36,000 annual pay.
| Extra-pay line | Amount |
|---|---|
| Gross overtime | £6,000 |
| Additional Income Tax at 20% | −£1,200 |
| Additional employee NI at 8% | −£480 |
| Additional take-home | £4,320 |
Those rates work for this example because all the added income remains in the specified bands. Another salary, Scottish tax bands, pension arrangement or loan plan can change the result. This is an annual scenario, not an exact forecast of one overtime payslip.
Why one payslip can look different
PAYE depends on your code and calculation basis. A large month can use more of that period's tax bands; a cumulative calculation also considers earlier pay and tax. A high deduction on one payment does not by itself prove annual overpayment.
NI and payroll student loans normally use the pay in each payment period. Concentrating overtime into one month can differ from spreading it evenly over the year. The annual calculator explains its approximation; dividing an annual figure by twelve does not make it an exact monthly deduction.
Read student loan deductions for thresholds and refund routes, or the emergency-tax guide if the code has a W1/M1 marker. Work for a separate employer belongs in the two-jobs calculator.
Count pension, costs and time without counting twice
Check whether overtime is pensionable and which earnings basis your scheme uses. The calculator can keep pension on the original pay only or apply the selected percentage to extra pay. It cannot determine the scheme terms from a job title.
Continuing the annual example, £400 extra travel or childcare costs reduces £4,320 extra net to £3,920. If the work also uses 40 unpaid travel hours, total time is 240 hours and the return after costs is £16.33 per hour. The £326.67 monthly figure is only an annual average.
Benefits and childcare support can also change with income. Check the benefits guidance and applicable income thresholds separately. Do not deduct a cost again if it was already taken from the payslip or included elsewhere in the comparison.
Time off in lieu and holiday pay need their own checks
Some employers agree time off in lieu instead of overtime pay. Check how time is earned, who approves it, when it can be taken and what happens to unused time when you leave. Do not treat a cash-pay estimate as the value of an unconfirmed time-off arrangement.
Regular overtime can also affect the pay rate during holiday. That is different from automatically generating extra holiday days for every extra hour in a regular-hours contract. The overtime and holiday-pay guide explains the working-pattern and country distinctions.
Working-time limits and rest requirements are separate from the pay calculation. A calculator cannot decide whether a rota or an opt-out meets all the conditions.
Check missing hours before blaming tax
Compare the authorised timesheet, paid hours and gross rate against the payslip earnings line. Check the payroll cut-off and ask whether a late-approved shift will appear next month. Keep the normal/basic and premium lines separate if that is how the employer presents them.
Ask: “Please confirm the authorised overtime hours, qualifying premium, pension treatment and payment run. Which entries on this payslip cover those shifts?” The annotated payslip examples show how earnings and deductions fit together.
Once gross pay is established, investigate the specific tax, NI, pension or loan line that changed. That produces a clearer question than comparing only the amount reaching the bank.
What to do next
- Confirm which hours qualify and the actual premium-inclusive rate.
- Keep extra earnings separate from overtime already included in annual baseline pay.
- Compare additional take-home with travel, childcare and unpaid time.
- Use the overtime mode with the real rate, shifts and tax-year recurrence.
- Check pensionability and relevant benefit thresholds before relying on the net difference.
- For missing pay, ask payroll for the authorised hours, rate and run in which they were paid.
Try the tool
Check your payslip or model a change.
Use the checker if you already have a payslip. Use the calculator if you want to model take-home pay or salary-sacrifice changes before payday.
About this guide
Written by Dan. Dan has spent 20 years working across payroll, HR, benefits and reward. IsMyPayRight is an independent personal project, not connected with any employer or with HMRC.
AI tools help with research and drafting. The official sources used are listed at the end of the guide.
This is general guidance, not a professional review of your circumstances. Read our editorial process and the corrections log.
Methodology and sources
See how the calculations work, which sources they use, how results are tested, and which payroll details the estimates cannot verify.
Common questions
- What is time-and-a-half on £20 an hour?
- £20 × 1.5 is £30 an hour; five qualifying paid hours give £150 gross. The contract determines whether that premium applies.
- Is overtime taxed at a special rate?
- There is no special universal overtime Income Tax rate. Extra pay follows employment-tax rules, while NI and loan deductions also depend on the payment period.
- Will the annual overtime result match one payslip?
- It is an annual planning comparison. A one-off month can differ because of PAYE history, period NI and loan thresholds, pension terms and other pay.
Official sources
Use these references to check the rules behind this guide. Check the tax year and your circumstances before applying an example to your own pay.