Overtime pay calculator
Work out your gross weekly pay with time-and-a-half or double-time hours, and understand the new federal overtime deduction.
Overtime premium alone: $80.00 per week. This is the portion that may qualify for the federal “no tax on overtime” deduction (up to $12,500/yr through 2028).
How overtime pay works
The federal Fair Labor Standards Act (FLSA) requires covered, non-exempt employees to be paid at least 1.5× their regular rate for hours worked past 40 in a workweek. The “premium” is the extra 0.5×: at $20/hour, each overtime hour pays your normal $20 plus a $10 premium. A few states add daily rules: California, for example, requires time-and-a-half past 8 hours in a day and double time past 12.
The 2026 overtime tax deduction, briefly
The One Big Beautiful Bill Act created a temporary deduction (2025–2028) for qualified overtime premiums. Key points: it covers only the premium portion (the extra half, not the whole overtime wage), caps at $12,500 per year ($25,000 for joint filers), phases out by $100 for every $1,000 of income above $150,000 ($300,000 joint), and is claimed on your tax return. Your paycheck withholding doesn't change, and FICA still applies to every overtime dollar. To see your overall take-home picture, use your state paycheck calculator.
Frequently asked questions
How is time and a half calculated?
Multiply your regular hourly rate by 1.5 for each overtime hour. At $20/hour, overtime pays $30/hour. Under the federal FLSA, non-exempt employees earn overtime for hours past 40 in a workweek; some states (like California) also require daily overtime.
Is overtime taxed at a higher rate?
No. Overtime is taxed like regular wages. Withholding can look higher on a big check because payroll systems annualize each paycheck, but it evens out when you file. Overtime is always subject to Social Security and Medicare.
How does the 2026 “no tax on overtime” deduction work?
For tax years 2025–2028, workers can deduct the overtime premium (only the extra “half” in time-and-a-half) up to $12,500 per year ($25,000 married filing jointly). It phases out above $150,000 of income ($300,000 joint). It is claimed when you file your return, not in your paycheck, and your employer must report qualified overtime on your W-2.
Who qualifies for overtime pay?
Non-exempt employees under the FLSA, generally hourly workers. Salaried employees can also be non-exempt if their pay or duties don’t meet exemption tests. Exempt roles (most salaried professional, executive, and administrative jobs above the salary threshold) are not entitled to overtime.