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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, 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.
  • Example

    Niamh earns €800 per week in her job. She gets some overtime, where she earns €100 extra for the week.

    Niamh is entitled a weekly rate band of €846.16.  She has tax credits worth €76.92.

    Calculation of Niamh's tax for the week with overtime
    DescriptionIncomeTax
    Normal pay €800  
    Overtime

    €100

    		  
    Total pay for the week

    €900

    		  
    Standard rate band taxed at 20%

    €846.16

    €169.23
    Pay above rate band taxed at 40%

    €53.84

    €21.54
    Gross tax  

    €190.77
    Less tax credits  

    €76.92
    Tax payable  

    €113.85

Published: 01 January 2024 Print this page

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