Why is overtime taxed more

May 3, Reply. Hey Yvonne, Overtime hours are treated the same as your regular working hours. November 24, Reply. November 27, Reply. August 10, Reply. August 12, Reply. August 9, Reply. Hey Josephine, Looks like Rick did a good job at answering your question! But as always, maintaining that work-life balance is important too.

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Bonus : Get our free page money-saving eBook when you subscribe. Want More. You'll also receive our emails directly to your inbox with money saving tips and access to more downloads. For small business. For enterprise. An overtime tax calculator can help you work this out quickly and easily, but you can also work out your own tax with a fairly straightforward calculation. So, does overtime get taxed? The simple answer is yes — overtime does get taxed.

In fact, overtime is taxed as the same rate as ordinary pay. Using an internet overtime tax calculator can make calculating tax easy, but you can also work out the number for yourself. Remember that there are different tax bands based on your total income, so you may find that your overtime pushes you into the next band.

Overtime is taxed because it is classified as a type of income. Your tax credits take into account your total amount of earnings, so you will need to include any overtime pay. Your taxes are worked out based on your full pay, so you need to add together your ordinary income with any overtime income in order to reach your own calculation. Similarly, you should factor any overtime earnings into your submissions for benefits, because this can impact your overall income.

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