Overtime Calculator
Calculate overtime pay, total gross pay and your 2026 federal tax break from the no-tax-on-overtime deduction (up to $12,500, or $25,000 joint). Example: $25 an hour with 10 overtime hours a week at time-and-a-half earns $19,500 in overtime a year and saves about $1,280 in federal tax.
Show steps
How to use the Overtime Calculator
- Enter your regular hourly rate and the hours you work each week.
- Enter weekly overtime hours and pick the overtime multiplier (1.5 for time and a half).
- Choose your filing status and press Calculate.
- Read your overtime pay, total pay and the federal tax saved by the overtime deduction.
Formula and method
Overtime pay = hourly rate x multiplier x overtime hours. Under the federal no-tax-on-overtime deduction, only the premium half of time-and-a-half (0.5 x rate x overtime hours) is deductible, up to $12,500 a year ($25,000 joint). The deduction shrinks by $100 for every $1,000 of income over $150,000 ($300,000 joint).
Worked example: $25 an hour, 10 overtime hours a week
| Step | Amount |
|---|---|
| Regular pay (40 h x $25 x 52) | $52,000 |
| Overtime pay (10 h x $37.50 x 52) | $19,500 |
| Total gross pay | $71,500 |
| Qualified premium (10 h x $12.50 x 52) | $6,500 |
| Federal tax without deduction (single) | $6,900 |
| Federal tax with deduction | $5,620 |
| Federal tax saved | $1,280 |
Overtime pay at common hourly rates (10 hours at 1.5x)
| Hourly rate | Overtime rate | Pay for 10 hours |
|---|---|---|
| $15 | $22.50 | $225 |
| $20 | $30.00 | $300 |
| $25 | $37.50 | $375 |
| $30 | $45.00 | $450 |
| $40 | $60.00 | $600 |
| $50 | $75.00 | $750 |
No tax on overtime: the 2026 rules
The deduction covers qualified overtime pay above your regular rate that federal wage law requires, reported on a W-2 or 1099. The maximum is $12,500 a year ($25,000 for joint filers), you can take it whether or not you itemize, and it phases out above $150,000 of modified AGI ($300,000 joint). It applies to tax years 2025 through 2028. Social Security and Medicare tax still apply to all overtime pay.
Frequently asked questions
How do I calculate overtime pay?
Multiply your regular hourly rate by 1.5 and by the overtime hours. At $20 an hour, 10 overtime hours pay $300.
Is overtime taxed at a higher rate?
No. Overtime is taxed like other wages. Withholding on one paycheck can look larger because the extra pay is annualized, but the tax at filing depends on your total income.
What is the no tax on overtime deduction?
A federal deduction of up to $12,500 ($25,000 joint) for the premium part of overtime pay, for tax years 2025 to 2028, phasing out above $150,000 ($300,000 joint) of income.
Does double time qualify?
Only the part that federal law requires, the 0.5x premium over your regular rate, qualifies. Extra premium above time and a half does not.
Does it cut Social Security and Medicare tax?
No. FICA taxes still apply to the full overtime pay.
Do I need to itemize?
No. You can take the deduction with the standard deduction.
Does this include state tax?
No. States treat overtime differently and most do not follow the federal deduction, so this is a federal estimate.
Sources
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