Overtime tax

MSt1963

Hi, 
I am working full-time and I am trying to boost my income. I initially thought of getting a second part-time job but I can’t find anything fitting the hours I need. 

I approached my employer and asked for additional work, sort of a second role within the company and they are happy to offer it but the pay would paid as overtime (based on the salary for that specific role I’ll be taking on, not my current salary) as they cannot have me on the payroll twice. Could someone help me understand how the overtime pay and tax would workout? 

Just for ease these are made figures;

current salary per annum 27000
new role offers per annum 22000 (I would do 20 hours per week) 

do I just add the gross and work the tax based on that? 

Sorry if it sound complicated. Any help would be appreciated. 

Thanks 
Sara 

Brie

I would think they should take the overtime rate for the extra hours in the £22k role add that to your pay and then do the tax calculations based on that.  You might want to check what the actual overtime rate is as even within the same company different people will have different contracts.  What you don't want is for someone to say "well it's only overtime if you are working more than 35 hours a week in that role" which might mean that you don't get the overtime rate for the extra 20 hours a week as you're only working 20 hours a week in that role and not 35.  

What I used to do re wages when I was working in a normal company (as opposed to the weird role I'm in now) was to take the annual salary multiply by .7 and then divide by 12 and that gave a close match to what my monthly take home would be after tax, NI & pension contributions.  

So assuming you work a 35 hour week normally then I would suggest that the hourly rate should be £22k / 1820 (hours in the year) x  maybe 1.5?  So a hourly rate of 12.09 becomes 18.13 which after tax etc might mean you walk home with 12.69 for the extra work?

Or put another way working the 2 roles you might end up with a take home pay of about £32k a year.

This assumes you will be making pension contributions on the second role (something to definitely check out), that all your other benefits (like life assurance) include the second role, that you get holiday pay (assuming you can coordinate taking holidays with 2 different managers).  

Another thing to consider is should you do this.  Your talking about working 55 hours a week which will be tiring and is unhealthy.  (of course so is having money worries so it's a balancing act).  And it will kill a lot of your social life as well as cut majorly into any family time.  Also check that there's no issue with you working excess hours legally - likely you'll need to sign a waiver about this.  (used to be a european directive but I'm not sure what happened with that on brexit.)

soolin

There isn’t any ‘overtime’ tax just normal tax and don’t forget NI as well

So yes, all your total income will be subject to tax and NI once your personal allowances are accounted for and will be subject to the rate of tax within the rate bands that it falls.

Dazed_and_C0nfused

MSt1963 said:

Hi, 
I am working full-time and I am trying to boost my income. I initially thought of getting a second part-time job but I can’t find anything fitting the hours I need. 

I approached my employer and asked for additional work, sort of a second role within the company and they are happy to offer it but the pay would paid as overtime (based on the salary for that specific role I’ll be taking on, not my current salary) as they cannot have me on the payroll twice. Could someone help me understand how the overtime pay and tax would workout? 

Just for ease these are made figures;

current salary per annum 27000
new role offers per annum 22000 (I would do 20 hours per week) 

do I just add the gross and work the tax based on that? 

Sorry if it sound complicated. Any help would be appreciated. 

Thanks 
Sara 

Unless your Scottish resident for tax purposes you will pay 20% tax and 12% NI on the additional earnings.

If your pension scheme uses the net pay method the tax will be slightly less as your pension contributions will reduce the amount liable to tax.

For example extra salary of £22,000 with 10% net pay contribution = taxable pay of £19,800.

[Deleted User]

Hi,

stuff some figures into this wee GADGET, give you an idea.