No. Overtime is taxed at the same rates as your ordinary pay, because income tax does not care which hour a pound came from. What changes is that the extra pay sits on top of everything else, so it is taxed at your highest rate rather than your average one. On £35,000 that highest rate is 28%, so £5,000 of overtime adds £3,599.92 to your take-home pay.
There is no overtime rate of tax
Income tax is charged on your total pay for the year, in bands. There is no separate rate for overtime, no rate for a second shift, and nothing in the PAYE rules that distinguishes an hour worked on a Sunday from an hour worked on a Tuesday.
What people are noticing is real, though. Ordinary pay fills the tax-free allowance and the lower bands first. Overtime lands on top of it, so every pound of overtime is taxed at your highest rate, while your ordinary pay is taxed at an average of all the rates below it. The overtime is not taxed more; it is the part that is taxed last.
On £35,000 a year, the next £5,000 you earn faces a combined rate of 28% once income tax and National Insurance are counted, so you keep £71.96 of the next hundred pounds.
What the extra hours are worth
Take £35,000 a year, which takes home £28,720.12. Add £5,000 of overtime over the year and the gross becomes £40,000, which takes home £32,320.04.
So the overtime has added £3,599.92 to your pay for the year. That is the number worth knowing before you agree to the hours, and it is the number a payslip never shows you, because a payslip only ever reports one month.
Why one month can look much worse
National Insurance is the reason. It is charged on the earnings of each pay period in its own right, against thresholds prescribed for that period, and there is no end-of-year reconciliation for an employee.
On a monthly payroll for 2026/27, nothing is due on the first £1,048. Between that and £4,189 the main rate of 8% applies, and above that the rate drops to 2%. A month with heavy overtime is charged at the main rate on the way up; a quiet month afterwards does not get anything back.
Income tax behaves differently. On a cumulative tax code, the payroll recalculates the whole year to date every pay day, so a month of overtime that pushed you into a higher band is corrected in later months if your pay falls back. The National Insurance is not.
When overtime crosses a tax band
Only the pounds above the line are taxed at the higher rate. Crossing £50,270 does not retax the pay below it: the pay up to that point stays at 20% and only the excess is charged at 40%.
That is worth saying plainly because the opposite belief stops people taking work that would have paid. You cannot earn less by earning more through a tax band. What you can do is keep a smaller share of the extra, which is a different thing.
A student loan behaves the same way: the repayment is a percentage of the pay above the threshold, so overtime increases it in proportion rather than in a step.
What else moves when overtime does
A workplace pension based on qualifying earnings usually counts overtime, so the contribution rises with the hours and so does the employer's. A scheme based on basic pay alone does not, and the difference is set by the scheme rules rather than by tax law.
Student loan repayments rise, because they are worked out on the pay in the period. If the overtime is enough to take a single month over the period threshold, a repayment can appear in a month even for someone whose basic salary is below the annual threshold.
Overtime can also change your holiday pay. Where overtime is regular, it forms part of normal pay for the purposes of holiday pay, and the reference period rules decide how much of it counts.
Does a time-and-a-half rate change the tax?
No. A premium rate is a higher gross amount for the hour, and the tax rules see the extra pounds and nothing else. An hour paid at time and a half produces one and a half times the gross and is taxed exactly as though you had earned the same amount at your ordinary rate.
There is no minimum or maximum amount of overtime set by tax law either. The rules your employer applies to when overtime is paid, and at what rate, come from your contract.
Is overtime worth doing?
That is your decision, and it depends on things a tax calculation cannot see. What we can tell you is the arithmetic: at £35,000 you keep £71.96 of the next hundred pounds, and £5,000 of overtime over a year leaves you £3,599.92 better off.
The number changes as your pay changes, and it changes sharply at a few specific points. Running your own salary through the calculator with the overtime added is the only way to see which side of those points you are on.