Overtime Hours CalculatorHours & pay tools
No tax on overtime calculator

No Tax on Overtime Calculator

For tax years 2025 through 2028, federal law allows a deduction for qualified overtime compensation. This page estimates how much of your overtime could reach that deduction: it works out the FLSA half-time premium — 0.5× your regular rate for each overtime hour — applies the $12,500 cap ($25,000 if married filing jointly), and reduces it for income above the phaseout threshold.

“No tax on overtime” is a nickname, not the rule. The deduction covers only the half-time premium the FLSA requires above your regular rate, it is capped, it phases out with income, and it does not remove Social Security or Medicare tax from any overtime hour. Everything below is an estimate produced in your browser — nothing you type is uploaded, and this page is not tax advice.

Read this before you use the number

This is an estimate, not tax advice, and not a promise about your return. It uses only the figures you type. It is not a withholding calculator and not a refund calculator: claiming the deduction does not automatically change the tax withheld from your paycheck, and the result below is not money you are owed.

The deduction does not make overtime exempt from payroll taxes. Social Security and Medicare (FICA) still apply to your overtime pay in full, and so do state and local income taxes unless your state says otherwise. Only federal taxable income is affected.

Last reviewed: August 7, 2026. Tax rules change. Check the official IRS and DOL sources below and confirm anything that matters with a tax professional.

Overtime deduction estimator

Overtime pay

Your FLSA regular rate, not your base wage, if the two differ.

1.5 is the federal time-and-a-half rate. Enter 1.5 or more; a higher multiplier raises your overtime pay, but only the FLSA half (0.5× the regular rate) can qualify.

Average hours per week required to be paid at the overtime rate under the federal FLSA.

Weeks in the tax year with that overtime. Up to 53.

Filing status

Married taxpayers must file a joint return to claim this deduction at all. Married filing separately does not qualify.

Income and tax year

MAGI for the whole return, including overtime pay and a spouse’s income on a joint return.

Leave blank to skip the tax-effect line. This page never guesses your bracket.

The deduction is available for 2025 through 2028. The dollar limits used here are the same in each of those years; the year only labels your estimate.

One of the fields needs fixing. The figures below are from your last valid entry.

Estimated deduction · tax year 2026 $2,880.00 Premium under the $12,500 cap · no phaseout at this MAGI
Total overtime pay (all overtime hours)
$8,640.00
Qualified overtime premium (the FLSA half above the regular rate)
$2,880.00
Cap for this filing status
$12,500
MAGI phaseout reduction
−$0.00
Illustrative federal tax effect (at 22%)
$633.60

How this was estimated

  1. Total overtime pay: $24.00 × 1.5 × 6 × 40 = $8,640.00.
  2. Qualified overtime premium (the FLSA half only): $24.00 × 0.5 × 6 × 40 = $2,880.00.
  3. Cap for single: lesser of $2,880.00 and $12,500 = $2,880.00.
  4. MAGI phaseout: $62,000 is not above $150,000, so the reduction is $0.00.
  5. Estimated deduction: $2,880.00 − $0.00 = $2,880.00.
  6. Illustrative tax effect: $2,880.00 × 22% = $633.60.

Estimate only, not tax advice, and not a refund. The tax-effect line assumes the whole deduction lands in the marginal rate you typed; what the deduction actually changes on a return depends on your full tax situation, including which brackets the deduction crosses and the other items on that return.

Only the FLSA half-time premium counts, not all of your overtime pay

The deduction does not apply to everything on an overtime line of your pay stub. It reaches only the premium part of that line, not the whole amount you were paid for those hours. Qualified overtime compensation is the amount required under section 7 of the Fair Labor Standards Act that exceeds your regular rate — generally the 0.5 “half” portion of time and a half. The 2025 Form 1040 instructions for Schedule 1-A, Part III state plainly that premium pay above time and a half is not qualified overtime compensation.

Total overtime pay = regular rate × multiplier × overtime hours × weeks
Qualified overtime premium = regular rate × 0.5 × overtime hours × weeks
Deduction before phaseout = lesser of (premium, cap)
Phaseout reduction = $100 × the whole number of full $1,000 steps in (MAGI − threshold), rounded down, and $0 when MAGI is at or below the threshold
Estimated deduction = deduction before phaseout − phaseout reduction, never below $0
Illustrative tax effect = estimated deduction × your marginal rate

At time and a half, an overtime hour pays 1.5 times the regular rate. One times the rate is what the hour would have paid anyway; the remaining 0.5 is the premium. So on a $24.00 rate, an overtime hour pays $36.00, of which $12.00 is the premium. Work 6 overtime hours a week for 40 weeks and the overtime pay is $8,640.00 but the premium — the part in scope — is $2,880.00.

If your employer pays double time, your overtime pay is higher — 2.0 times the rate — but the qualified premium stays at 0.5 times the rate per overtime hour. The extra half above time and a half is premium pay your employer chose or agreed to pay, not pay the FLSA requires, so it is not qualified overtime compensation. On a $20.00 rate and 10 overtime hours, double time pays $400.00 of overtime pay while the qualified premium is $100.00, exactly as it would be at time and a half. This estimator covers standard FLSA time and a half only: enter a multiplier below 1.5 and it stops with an error rather than showing a premium, because alternative FLSA arrangements need payroll or tax guidance. The overtime pay calculator shows the gross-pay side.

Overtime that exists only because your state law, union contract or employer policy is more generous than federal law does not qualify by itself, and neither does the extra pay in a shift differential, a weekend bonus or a holiday rate. Your regular rate matters too: under the DOL rules on the regular rate, non-discretionary bonuses and similar earnings raise it, which raises the premium built on it.

The cap and the income phaseout

Two limits sit on top of the premium, and both are applied to the whole return rather than to each worker separately.

Annual cap

The deduction is capped at $12,500 per return, or $25,000 for a married couple filing jointly. On a joint return the $25,000 is a single ceiling for the couple, not $25,000 each. Premium above the cap is simply not deductible.

MAGI phaseout

The deduction is reduced by $100 for each full $1,000 of modified adjusted gross income above $150,000, or above $300,000 on a joint return. The reduction never pushes the deduction below zero. At the single threshold the deduction is fully gone once MAGI reaches $275,000 with a maximum premium, and sooner if the premium is smaller than the cap.

Partial thousands are dropped, not counted. The 2025 Schedule 1-A (Form 1040), Part III, lines 18–21, is explicit: divide the income above the threshold by $1,000 and, if the result is not a whole number, decrease it to the next lower whole number, then multiply that whole number by $100. This page follows that method. So $999 above the threshold reduces nothing, $1,000 reduces the deduction by $100, $1,500 still reduces it by $100, and $2,000 reduces it by $200.

MAGI is the figure for the entire return, so a spouse’s income counts on a joint return, and your own overtime pay is part of it. Everything here remains an estimate rather than tax advice: the arithmetic follows Schedule 1-A, but the MAGI you type and your eligibility are yours to confirm.

The tax-effect line

A deduction lowers taxable income; it is not a credit and not a payment. If you type a marginal rate, the page multiplies your estimated deduction by it to show roughly how much federal income tax that deduction could avoid. It is illustrative only. A real deduction can straddle two brackets, can change other income-based calculations on your return, and is affected by everything else on it. Leave the marginal rate blank if you do not want that line, and never treat it as a refund, a guarantee or an amount owed to you.

Conditions this estimate assumes are met

The calculator does the arithmetic; it cannot decide whether you qualify. It does not ask for your job title or your employer, and eligibility can never be inferred from an occupation — two people with the same job title can land on opposite sides of these rules. Every item below has to be true independently.

  • Qualified compensation. The overtime must be compensation required under section 7 of the Fair Labor Standards Act, and the deductible part is the half-time premium above the regular rate. Premium pay above time and a half is not qualified overtime compensation.
  • Valid Social Security number. The taxpayer must include a valid SSN on the return. This page does not ask for one and you should never enter an SSN into any calculator.
  • Joint return if married. Married taxpayers must file jointly. Married filing separately is not eligible.
  • Standard deduction or itemizing. You do not have to itemize. Taxpayers who take the standard deduction can claim this one as well.
  • Employment classification. Exempt employees, independent contractors and workers outside FLSA coverage do not have FLSA-required overtime, so there is nothing here for them to deduct.
  • Alternative FLSA overtime rules. Some workplaces compute overtime under alternative FLSA provisions, such as certain hospital or public-safety arrangements. The premium in those cases may not match the simple formula above, and this estimator does not cover them — it requires a multiplier of at least 1.5 and refuses to estimate below that.
  • State-only overtime. Overtime owed under a state law, contract or policy but not required by federal law does not qualify on its own, and neither do holiday or weekend premiums.
  • Reporting. The amount you can claim depends on qualified overtime being determined and reported properly, including on the forms your employer issues. Your own figures may not match what is reported.
  • Your personal tax facts. Filing status, MAGI, dependents, other deductions and credits, alternative minimum tax and state rules can all change the outcome.

Any one of these can make the real deduction differ from the number this page shows, or make it zero. Treat the result as a rough upper bound to discuss with a tax professional, not as a figure to put on a return.

Two worked examples

Under the cap, no phaseout

A warehouse worker earns $24.00 an hour and works 6 FLSA overtime hours a week for 40 weeks at time and a half. Their MAGI is $62,000 and they file single with a 22% marginal rate.

  1. Overtime pay: $24.00 × 1.5 × 6 × 40 = $8,640.00.
  2. Qualified premium: $24.00 × 0.5 × 6 × 40 = $2,880.00.
  3. Cap: the premium is under $12,500, so it is not reduced.
  4. Phaseout: MAGI of $62,000 is below $150,000, so the reduction is $0.00.
  5. Illustrative tax effect: $2,880.00 × 22% = $633.60.

Estimated deduction: $2,880.00

Their total overtime pay for the year is $8,640.00. Only the $2,880.00 premium is in scope, and the $633.60 is a rough tax effect, not a refund.

Under the joint cap, reduced by the phaseout

A married couple files jointly with a MAGI of $340,000. One spouse works 12 FLSA overtime hours a week for 48 weeks at time and a half on a $58.00 regular rate.

  1. Qualified premium: $58.00 × 0.5 × 12 × 48 = $16,704.00.
  2. Cap: lesser of $16,704.00 and $25,000.00 = $16,704.00.
  3. Phaseout: ($340,000 − $300,000) ÷ $1,000 = 40 whole $1,000 steps × $100 = $4,000.00.
  4. Deduction: $16,704.00 − $4,000.00 = $12,704.00.

Estimated deduction: $12,704.00

A MAGI of $340,600 would give the same $4,000.00 reduction: the extra $600 is not a full $1,000 step, so Schedule 1-A drops it. The reduction only moves again at $341,000, where it becomes $4,100.00.

Enter those figures in the calculator to reproduce this result. The first example is loaded by default, so you can change one field at a time and watch which line moves.

Official sources

The rules above come from these federal pages. They are the versions reviewed on August 7, 2026; read them directly before relying on anything here, because guidance is still being added.

Common questions

Is overtime really untaxed now?
No. The name is misleading. Overtime is still wages: it is still subject to Social Security and Medicare tax, still reported, and still part of your income. What exists is a capped, income-limited federal income-tax deduction on the overtime premium for tax years 2025 through 2028.
Will my paycheck get bigger?
Not by itself. The deduction is claimed on a tax return; it does not automatically change the tax withheld from your pay. Withholding changes only if your Form W-4 or your employer’s payroll setup changes, which is a separate decision worth discussing with your payroll department or a tax professional.
Why is my deduction smaller than my overtime pay?
Because only the FLSA half-time premium qualifies. At time and a half, roughly one third of each overtime dollar is premium; the rest is the pay the hour would have earned at your regular rate. At double time the qualified premium is still only 0.5× the regular rate per hour, so it is one quarter of the overtime pay — the extra half above time and a half is not qualified overtime compensation. The cap and the MAGI phaseout can cut it further.
I get double time. Does the whole extra 1.0× qualify?
No. Qualified overtime compensation is the amount FLSA section 7 requires above your regular rate, which is the 0.5 half of time and a half. The 2025 Form 1040 instructions for Schedule 1-A, Part III say premium pay above time and a half is not qualified overtime compensation. Enter 2.0 here and the calculator shows the higher overtime pay but keeps the qualified premium at 0.5× the regular rate per overtime hour.
My overtime multiplier is below 1.5. Why does the calculator refuse?
Because it is a simple standard-FLSA estimator. Below time and a half there is no federally required half-time premium for it to compute, and showing one would be wrong. Alternative FLSA arrangements — certain hospital, public-safety or fluctuating-workweek setups — are real but need payroll or tax guidance rather than this page.
Do I have to itemize to claim it?
No. It is available whether you take the standard deduction or itemize. That does not mean it is automatic — the other conditions, including the SSN and joint-filing requirements, still apply.
My state pays overtime after 8 hours in a day. Does that count?
Not on its own. The deduction is tied to overtime required under section 7 of the federal FLSA. Daily overtime that exists only under state law, a contract or an employer policy is not federally required overtime, even though it is real money on your check.
What if I do not know my marginal rate?
Leave the field blank. The deduction estimate still appears and the tax-effect line simply shows that no rate was entered. This page deliberately does not guess a bracket from your income, because that would need your full return.
Is anything I type sent anywhere?
No. Every figure is calculated in your browser on this page. This site's scripts do not upload or deliberately store what you enter, though your browser may restore form values according to its own settings. The page never asks for your name, your Social Security number or any other identifying detail, and you should not enter them anywhere on it.

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