Overtime Pay Calculator (2026)

How Overtime Pay Works

Under the federal Fair Labor Standards Act (FLSA), non-exempt employees must receive at least 1.5× their regular rate for hours worked over 40 in a workweek. If you earn $25/hour, overtime pay is $37.50/hour. Your employer pays the full OT rate; only the premium ("half") matters for the 2026 OBBBA deduction.

Exempt vs non-exempt: Salaried title alone does not block overtime. Executive, administrative, professional, and certain computer/outside-sales roles may be exempt if they meet DOL duty and salary tests. Most hourly workers and many salaried workers under the threshold are non-exempt and owed OT. When in doubt, check the DOL overtime page or your state labor agency.

Daily Overtime and Double-Time by State

Federal law only requires weekly OT (over 40 hours). Some states add daily overtime rules:

• California (Labor Code 510): Over 8 hours in a day = 1.5×; over 12 hours in a day = 2×; 7th consecutive day: first 8 hours at 1.5×, beyond 8 at 2×. Use the double-time hours field in the calculator for CA-style premiums.
• Alaska, Nevada, Colorado and others have daily OT thresholds for certain workers - verify with your state DOR and labor department.

Model California take-home on regular and OT wages with our California paycheck calculator.

No Tax on Overtime in 2026 (OBBBA)

The One Big Beautiful Bill Act created a federal income tax deduction on the overtime premium only (the "half" in time-and-a-half), not the full OT dollar amount. Limits: $12,500 single / $25,000 married filing jointly per year. Phase-out begins at $150,000 MAGI ($300,000 joint). Effective through 2028.

Employers still withhold federal and state tax on the full overtime check. You claim the deduction at filing or reduce withholding via W-4 Step 4(b). The calculator shows take-home with and without the OBBBA W-4 adjustment so you see the cash-flow difference. Learn how FICA applies to overtime (full gross, including OT, is subject to Social Security and Medicare).

Overtime Take-Home Example

$25/hour base, 40 regular hours + 10 overtime hours per week, single filer, California, 2026. Computed with the same engine as the calculator above.

Methodology · See also is overtime taxed more?

Will Overtime Push Me Into a Higher Tax Bracket?

Overtime can push your annual income higher, but only the extra dollars are taxed at the higher marginal rate - not your entire paycheck. Your effective tax rate (total tax ÷ total income) rises more slowly than your top bracket.

A single big OT check may trigger heavier withholding that period, which feels like a 40% OT tax. That is not your final tax. You reconcile when you file. Use our take-home pay guide for the full bracket math.

How to Keep More of Your Overtime

• W-4 Step 4(b): Add the expected annual OBBBA overtime premium as an extra deduction if you will claim it on your return - lowers withholding on OT checks.
• 401(k) / HSA: Pre-tax deferrals reduce federal and state income tax (FICA still applies to 401(k) deferrals). See Roth vs Traditional 401(k).
• Timing: OT in January resets FICA withholding for the year but does not change your annual tax liability by itself.

Frequently asked questions

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