In the framework of real-time time-dependent density functional theory (RT-TDDFT) we unravel the layer-resolved dynamics of the electronic structure of a (Fe)$_1$/(MgO)$_3$(001) multilayer system after an optical excitation with a frequency below the band gap of bulk MgO. Substantial transient changes to the electronic structure, which persist after the duration of the pulse, are mainly observed for in-plane polarized electric fields, corresponding to a laser pulse arriving perpendicular to the interface. While the strongest charge redistribution takes place in the Fe layer, a time-dependent change in the occupation numbers is visible in all layers, mediated by the presence of interface states. The time evolution of the layer-resolved time-dependent occupation numbers indicates a strong orbital dependence with the depletion from in-plane orbitals (e. g., $d_{x^2-y^2}$ of Fe) and accumulation in out-of-plane orbitals ($d_{3z^2-r^2}$ of Fe and $p_z$ of apical oxygen). We also observe a small net charge transfer away from oxygen towards the Mg sites even for MgO layers which are not directly in contact with the metallic Fe.
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