Pay
Tax on overtime: how much of each extra hour you keep
Last updated 16 October 2026
Overtime is taxed as normal pay, at your top rates. Above the 20% band you keep a little over half of each overtime euro in 2026.
Overtime has no special tax rate. It is added to your pay for the period and taxed through PAYE like the rest of your wages. It comes on top of your basic pay, so it is taxed at your top rates. That is why a long week can feel heavily taxed.
What you keep
Take five hours of overtime a week, for 46 weeks of the year, at time and a half on a €22 basic hourly rate: €7,590.00 of extra pay in 2026. What a single person keeps depends on their basic pay:
| Basic salary | Overtime kept | Share kept |
|---|---|---|
| €30,000 | €5,522.68 | 72.8% |
| €42,000 | €4,404.68 | 58% |
| €50,000 | €4,004.29 | 52.8% |
| €75,000 | €3,625.18 | 47.8% |
On €42,000 the overtime straddles the €44,000 band, so part is taxed at 20% and part at 40%. On €75,000 some of it also crosses into 8% USC above €70,044.
Is it worth it
Every hour of overtime leaves you better off. Income tax at 40% applies only to the part of your pay above the band, never to all of it. But the hourly gain is smaller than the overtime rate suggests. Above the band, about 47 cent in every euro goes in income tax, USC and PRSI.
Your rights to overtime pay
There is no legal right to a higher rate for overtime in Ireland, and no overtime rate set by law. Your contract, a sectoral Employment Regulation Order or a Registered Employment Agreement may set one, so check it. Sunday work is different: if your contract doesn't already reflect it, your employer must give a reasonable allowance, pay increase or paid time off. Average working time is capped at 48 hours a week. Citizens Information explains these rules on its working hours page.
On the payslip
On the cumulative basis, a week with lots of overtime may take more tax that week, and a quiet week less. So the year evens out. PRSI is worked out on each week's pay, so overtime can take a lower-paid worker above €424 a week, where the PRSI credit stops.
Work it out
Sources
- Revenue: Tax rates, bands and reliefs (checked 25/10/2026)
- Revenue: Standard rates and thresholds of USC (checked 25/10/2026)
- Department of Social Protection: PRSI 2026 Contribution Rates and User Guide (SW 14) (checked 25/10/2026)
General information, not tax advice. HeyPenny is not a tax agent.