Police Overtime After Tax –
Why It Feels Smaller
You work 10 hours on a rest day. The headline number looks strong. Then payday arrives and it feels… smaller than expected.
This guide explains exactly why that happens.
Not because overtime is “over-taxed”. Not because payroll is wrong. But because of how marginal tax, National Insurance and pension deductions work in UK policing.
If you understand the structure, the frustration makes more sense.
Executive Summary
- Overtime is taxed at your marginal rate.
- Higher earners often see 40% income tax applied.
- National Insurance is calculated in bands.
- Pension contributions may apply to overtime.
Overtime is simple in theory: it is added on top of what you already earn.
The Core Concept: Marginal Tax
The UK tax system works in bands. You do not pay 40% on all your income; you only pay 40% on income above the higher-rate threshold.
However, when you earn overtime, it is added on top of your base salary. This means it often lands directly inside your highest tax band.
The Threshold Trap
If overtime pushes you above £50,270, that portion is taxed at 40% instead of 20%.
Tax Bands
Standard England & Wales bands. If you are close to the threshold, most OT may be taxed at 40%.
National Insurance
& Pension Dedutions
Income tax isn't the only factor. National Insurance (NI) is calculated per pay period, meaning monthly spikes can increase your NI liability.
Furthermore, if your overtime is pensionable, another significant slice is taken for your future security.
National Insurance Impact
Calculated per month. Spikes may temporarily move you into different NI bands.
Pension Contributions
Short-term reduction, long-term benefit. Deductions can be 12.44% - 13.44%.
Example Scenario
Marginal taxation in action for a typical Sergeant.
Based on a 10hr Rest Day at 1.5x rank pay.
Headline: £375. Take Home: ~£169.
Nothing unusual happened. This is the natural result of sitting in a higher tax bracket.
Why It Feels Worse
Psychology plays a major role. Your base pay feels stable and certain. Overtime feels extra — a special effort that deserves a special reward.
When extra effort is met with heavily reduced pay, it feels like a loss. In reality, it is taxed at the exact same rates as your base. The only difference is its position in the band.
Payroll Distortion
Payroll systems calculate tax per period. Large payments in a single month may temporarily push you into a higher band, causing a larger deduction that month.
HMRC reconciles total earnings over the full tax year. Short-term spikes rarely mean permanent higher taxation across the year.
Does Overtime Ever Not Feel Worth It?
Financial gain is only one side of the coin.
High earners in top tax bands see diminishing returns. The net hourly rate drops significantly.
Cognitive fatigue increases. Decision-making is impacted. Errors are more likely.
Rest periods shorten. Work-life balance suffers. Burnout risk is amplified.
Common Misunderstandings
False. It is simply added to your total income and taxed at your current marginal rate.
Unlikely. Large OT payments can push you into a higher monthly tax code, which HMRC reconciles later.
Common Questions
• Why is my overtime taxed at 40%?
Because it sits above the higher rate threshold when added to your base pay. Overtime is added to your existing income, meaning it often lands directly inside your highest tax band.
• Does overtime push me into higher tax permanently?
Only if your total annual income exceeds the threshold. HMRC reconciles your total earnings over the full tax year.
• Is overtime pensionable?
Often yes, depending on your scheme rules (e.g. 2015 CARE scheme). This increases your future pension but reduces your immediate take-home pay.
• Is it worth doing overtime in higher tax bands?
This depends on your financial priorities and fatigue tolerance. While the net gain is lower at the 40% band, it still represents a significant increase in cash flow for many.
• Can payroll over-deduct tax?
Temporary distortions can happen if a large overtime payment pushes you into a higher band for a single month, but these are reconciled by HMRC over the tax year.
Related Resources
Police Overtime Explained
Multipliers, rules and enhancement rates.
Take-Home Pay
The full deduction chain explained.
Pay Rise 2026 Forecast
Independent projection analysis.
Real Terms Pay
Inflation vs earnings since 2010.
Is Promotion Worth It?
PC vs Sgt vs Insp net pay comparison.