Is overtime taxed more in New Zealand?

There is no special overtime tax, but because overtime stacks on top of your normal pay it is taxed at your marginal rate, which is your highest band. So the after-tax value of each overtime hour can be lower than your headline rate suggests.

How do I work out the real value of overtime?

Take the overtime pay, then deduct tax at your marginal rate to get the net. This calculator does that, so you can see what an hour of overtime actually puts in your pocket after tax.

Why does my overtime feel heavily taxed?

Because it is taxed at your top marginal rate, the deduction is larger than on your first dollars of income. The square-up at year end settles the total, but the net per hour is what matters for the decision.

Is Overtime Worth It Calculator

This New Zealand calculator shows the after-tax value of overtime hours once the higher marginal tax rate is applied. Because overtime sits on top of your normal income, it is taxed at your top band, so the net per hour is often less than the headline rate suggests. You enter your income, overtime rate and hours, and the tool shows what those extra hours actually add to your pay, helping you decide whether the time is worth it.

Your normal annual income

Overtime hourly rate

Overtime hours

net pay from the overtime after tax

Gross overtime pay$0

Net per hour$0

Your marginal rate0%

Based on the 2025/2026 income tax brackets. Overtime is taxed at your marginal rate because it stacks on your income. This excludes the ACC levy, KiwiSaver and student loan, which would reduce the net further. Estimate only, not tax advice.

How it works

The calculator works out the tax on your normal income, then on your income plus the overtime pay. The difference is the tax on the overtime, which it deducts to show your net and your net per hour. Because the overtime is taxed at your marginal rate, the net per hour can be well below the gross rate, which is the figure to weigh against your time.

Worked example

On a $70,000 income, 40 hours of overtime at $45 an hour is $1,800 gross. Taxed at the 30% marginal rate, the tax is about $540, leaving roughly $1,260 net, or about $31.50 net per hour rather than the $45 headline rate.

Related calculators

PAYE Calculator: tax on your pay.
Hourly to Salary Calculator: convert pay.
Back Pay Tax Calculator: tax on a lump sum.
Income Tax Calculator: tax on any income.

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