Overtime and bonuses

How overtime and bonuses are taxed

If you earn overtime or bonus pay, they are included as part of your pay for that week or month. The total amount is chargeable to Income Tax (IT), Universal Social Charge (USC) and Pay Related Social Insurance (PRSI). 

Your pay is taxed as follows:

• your pay is taxed at the standard rate of tax up to your rate band limit
• any pay above your rate band limit is taxed at the higher rate of tax
• add the two amounts above together
• this amount is then reduced by your tax credits to give the amount of tax due.