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Overtime Pay Calculator

Compute time-and-a-half earnings and the no-tax-on-overtime deduction: the FLSA premium, the $12,500/$25,000 cap, the income phase-out, and your tax savings.

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hours
weeks
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Xfin

Annual overtime earnings

$8,250.00

Overtime rate
$33.00
Overtime pay per week
$165.00
Half-time premium (deductible base)
$2,750.00
No-tax-on-overtime deduction
$2,750.00
Estimated tax savings
$605.00
Deduction status
Your full half-time premium qualifies. The deduction applies for tax years 2025 through 2028, is claimed on Schedule 1-A, and works even if you take the standard deduction.

Quick answer: With the example inputs this page loads by default, the headline result (Annual overtime earnings) comes to $8,250.00. Compute time-and-a-half earnings and the no-tax-on-overtime deduction: the FLSA premium, the $12,500/$25,000 cap, the income phase-out, and your tax savings. Change any input above and every figure updates instantly in your browser.

Figures shown are for the 2026 tax year. The calculator always applies the current year's figures.

Your inputs never leave your browser, and nothing is stored. See our privacy policy .

Fact-check: results on this page are verified against an independently coded reference oracle that covers all 106 calculators on this site. See how we verify .

Overtime pays at least 1.5 times your regular rate for hours past 40 a week (FLSA), and for 2025 through 2028 the half-time premium is federally deductible: up to $12,500 ($25,000 for joint filers), phasing out above $150,000 of income ($300,000 joint). This calculator computes your overtime earnings, the deductible premium, and what the deduction saves at your tax rate.

What this result means

Two figures deserve attention. The annual overtime pay line is the raw earnings boost. The deduction line is the new part: only the half-time premium qualifies (not the whole overtime check), it is an income tax deduction rather than an exemption, so Social Security and Medicare still come out of every overtime dollar, and your employer withholds normally, with the benefit arriving at filing. The deduction expires after 2028 unless extended, so treat it as a temporary bonus rather than a permanent raise. Not tax advice.

Assumptions

  • Overtime pay follows the Fair Labor Standards Act: hours past 40 in a workweek pay at least 1.5 times the regular rate. The calculator multiplies your wage by the chosen multiplier for the overtime hours and weeks you enter; state rules that trigger overtime daily (like California's over-8-hours rule) are not modeled separately.
  • The no-tax-on-overtime deduction (One Big Beautiful Bill Act, claimed on Schedule 1-A) covers qualified overtime compensation: the FLSA-required premium above your regular rate, which at any multiplier is modeled as wage x 0.5 x overtime hours. Pay above the required premium (for example the extra half of a double-time deal) does not qualify.
  • The deduction caps at $12,500 ($25,000 married filing jointly) and is reduced by $100 for each $1,000 (or fraction) of modified AGI above $150,000 ($300,000 joint). It applies for tax years 2025 through 2028, works alongside the standard deduction, and requires a Social Security number.
  • The deduction reduces federal income tax only. Social Security and Medicare (7.65 percent) still apply to every overtime dollar, employer withholding is unchanged during the year, and most states still tax overtime fully, so the benefit arrives at federal filing time.
  • Tax savings are the deduction times the single marginal rate you enter; the real saving can differ if the deduction spans brackets or affects income-tested items.
  • This is an estimate for educational purposes only, not tax advice. Confirm current rules with IRS guidance on the overtime deduction.

Key terms

Definitions for the terms this calculator uses, in our finance glossary .

How it works

Two layers: the pay math, then the new deduction.

FLSA overtime. Hours past 40 in a workweek pay at least 1.5 times the regular rate (Fair Labor Standards Act, Section 7). Overtime earnings = wage x multiplier x overtime hours x weeks. Some states add daily triggers (California pays overtime past 8 hours in a day), which this weekly model does not separately track.

The no-tax-on-overtime deduction. For tax years 2025 through 2028, the One Big Beautiful Bill Act makes qualified overtime compensation deductible from federal income tax, claimed on the new Schedule 1-A and available with the standard deduction. “Qualified” means the FLSA-required premium above your regular rate, modeled as wage x 0.5 per overtime hour; a richer contractual multiplier does not enlarge the deductible part. The deduction caps at $12,500 ($25,000 married filing jointly) and shrinks by $100 for each $1,000 (or fraction) of modified AGI above $150,000 ($300,000 joint). FICA still applies to every overtime dollar, and withholding is unchanged during the year, so the benefit lands at filing.

Worked example

$22 an hour, 5 overtime hours a week, 50 weeks, single, $90,000 MAGI, 22 percent marginal rate.

  • Overtime rate: $22 x 1.5 = $33. Weekly overtime: $165. Annual: $8,250.
  • Deductible premium: $22 x 0.5 x 5 x 50 = $2,750 (under the $12,500 cap; no phase-out at $90,000).
  • Tax savings: 22% x $2,750 = $605 at filing.

At $160,000 MAGI the phase-out trims $1,000 (10 x $100), leaving a $1,750 deduction.

Scope and limitations

Weekly FLSA overtime at a constant wage; no daily-overtime states, tipped credits, or fluctuating workweek methods. The deduction model uses the pinned statutory figures ($12,500/$25,000 caps, $150,000/$300,000 thresholds, 2025-2028) and a single marginal rate for the savings estimate. FICA, state taxes, and withholding timing are unchanged by the deduction. This is an estimate for education, not tax advice.

Sources

Frequently asked questions

Is overtime really tax-free now?
Not entirely. For 2025 through 2028, the half-time premium portion of FLSA overtime is deductible from federal income tax, up to $12,500 ($25,000 joint) with an income phase-out. The base-rate part of overtime hours, Social Security and Medicare, and most state taxes still apply in full.
How is overtime pay calculated?
Hours over 40 in a workweek pay at least 1.5 times your regular rate under the FLSA. At a $22 wage, overtime hours pay $33, so 5 overtime hours a week adds $165 weekly, about $8,250 over 50 weeks. Some states add daily overtime triggers on top of the federal weekly rule.
What part of my overtime is deductible?
Only the required premium: the pay above your regular rate that the FLSA mandates, which is half your base wage per overtime hour. On a $22 wage, that is $11 of each overtime hour, not the full $33. A richer contractual rate, like double time, does not enlarge the deductible portion.
Do I need to itemize to claim the overtime deduction?
No. It is claimed on the new Schedule 1-A and works alongside the standard deduction, which is what makes it valuable for hourly workers who rarely itemize. Employers report qualified overtime separately on the W-2 so the amount is easy to claim.
Does working overtime push me into a higher tax bracket?
It can raise your marginal rate, but brackets are marginal: only the dollars inside the higher bracket pay the higher rate, never your whole income. Overtime always leaves you with more after-tax money, and for 2025 through 2028 the deductible premium tilts the math further in its favor.

Related calculators

Learn how this works

New to this topic? Our companion guide explains it in plain language: Is Overtime Tax Free Now? How the OBBBA Overtime and Tips Deductions Work

By Sam Sage Last reviewed .