Home / Overtime calculator
Overtime Calculator 2026
Find your overtime rate, how much more you take home after taxes, and how much the 2026 no tax on overtime deduction could save you.
Your numbers
How overtime pay works
The Fair Labor Standards Act requires overtime of at least 1.5 times your regular rate for hours worked over 40 in a workweek, for employees who are not exempt. Salaried managers and many professionals are exempt. Some states add daily overtime rules, and some employers pay more than the minimum.
Overtime is not taxed at a special rate. It is added to your wages, so Social Security, Medicare, and income tax apply as usual. What you keep from each overtime hour depends on your tax bracket, which is why this calculator shows your after-tax pay per overtime hour.
No tax on overtime, explained
For tax years 2025 through 2028, federal law lets overtime-eligible workers deduct the premium portion of required overtime pay. On time and a half, that is the extra half. The deduction is up to $12,500 a year, or $25,000 for married couples filing jointly, and shrinks by $100 for each $1,000 of income over $150,000 ($300,000 joint). You must have a Social Security number valid for work, and married couples must file jointly.
The deduction lowers federal income tax only. Social Security, Medicare, and most state income taxes still apply, and most workers see the benefit when they file rather than in each paycheck.
Overtime take-home examples
Single filer, 40 regular hours plus 10 overtime hours a week at time and a half, paid weekly, federal taxes only.
| Hourly rate | Overtime rate | Weekly overtime pay | Extra weekly take-home | Yearly tax saved by deduction |
|---|---|---|---|---|
| $15.00 | $22.50 | $225.00 | $180.79 | $468 |
| $20.00 | $30.00 | $300.00 | $241.05 | $624 |
| $25.00 | $37.50 | $375.00 | $291.70 | $1,280 |
| $30.00 | $45.00 | $450.00 | $324.46 | $1,716 |
| $40.00 | $60.00 | $600.00 | $422.10 | $2,288 |
Frequently asked questions
How is overtime pay calculated?
Under federal law, hourly employees who are not exempt earn at least 1.5 times their regular rate for hours over 40 in a workweek. At $20 an hour, overtime pays $30 an hour. Some states, such as California, also require overtime after 8 hours in a day, and some employers pay double time.
Is overtime taxed more than regular pay?
No. Overtime is taxed at the same rates as your other wages. A paycheck with overtime can push more of that check into a higher withholding bracket, but your actual tax is based on your total income for the year.
How does no tax on overtime work?
For 2025 through 2028, overtime-eligible workers can deduct the premium part of their federally required overtime pay (the extra half in time and a half) on their federal return. The deduction is capped at $12,500, or $25,000 for joint filers, and shrinks by $100 for every $1,000 of income over $150,000 ($300,000 joint). It does not reduce Social Security or Medicare taxes.
Does no tax on overtime show up in my paycheck?
Usually not. Employers keep withholding normally, and you claim the deduction when you file. You can reduce withholding during the year by entering the expected deduction on Form W-4, Step 4(b).
Does double time count for the overtime deduction?
Only the part of overtime pay required by federal law counts. If your employer pays double time, the deduction is still limited to the half-time premium on hours over 40 in a week.
Sources
- https://www.law.cornell.edu/uscode/text/26/225
- https://www.irs.gov/newsroom/questions-and-answers-about-the-new-deduction-for-qualified-overtime-compensation
- https://www.dol.gov/agencies/whd/overtime
- https://www.irs.gov/pub/irs-drop/rp-25-32.pdf
- https://www.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2026-including-amendments-from-the-one-big-beautiful-bill
- https://www.ssa.gov/news/en/cola/factsheets/2026.html