Tax question?

[Debtandmoredebt]

Please can someone explain this to me because I can’t find the answer to this on good old Google.

I work part time (20hrs)
When I work overtime I seem to be taxed a fortune despite only earning somewhere around 13k a year. For example last month my take home worked out at less than £10 an hour after tax/pension and NI. I’ve checked and my tax code is apparently correct.

I’ve been offered lots of overtime this month but my colleagues have told me the more overtime I do in that pay month (so say Sept-Oct)) the more I am taxed. So it’s not worth working more than 20hrs overtime they say otherwise I won’t see it at all for tax.

Is this correct and if so why is this? I thought the tax period was yearly and I’ll never go over 50k so surely it doesn’t matter what I’m taxed in that month it should only be the standard rate.

Thanks to anyone who fancies explaining this boring question to someone who’s clearly a bit financially thick 😄

If you only earn £13k then most of that will be untaxed as it's not much over the personal allowance amount - if you look at your payslip for a basic month, you'll pay almost no tax out of your salary. However everything you then earn via overtime will be taxed at 20% as your base salary has consumed the personal allowance.

You shouldn't be taxed "a fortune" but 20% of what you earn over your tax free allowance. Unless you're contributing a huge amount through pension and have a large student loan, overtime will still be providing good extra income surely?

www.thesalarycalculator.co.uk/salary.php

Plug all your stuff in here and play around with it

Think the tax threshold for 2024/2025 is £12,750. If you earn above that, you start paying income tax so it will seem like every pound you earn per hour is less because you're suddenly being taxed.

Above that you pay 20% tax.

For National insurance, you don't pay till you earn around £12k and above that you pay 8% I think it is.

So essentially the extra £ above both threshold will be taxed around 28% if that makes sense

So for every £15 I earn, I am paid around £10 and have £5 taxen in tax/NI and pension (a tiny amount)

So the figure of 28% sounds about right but it does sound depressing to be loosing a third of my hourly rate.

Thanks all!