ΣBenefitMath

FederalSame rules in every state

No Tax on Overtime Calculator

See how much of your overtime you can deduct and how much federal tax that actually saves.

This is a federal income tax tool for tax year 2026 (the return you file in early 2027). It does not change SSI, SNAP or other benefits; those are on the benefits calculator.

Your overtime
Hours over 40
Up to 52
Optional. Use your pay stubs. Overrides the 3 boxes above.
Your other income
Gross pay before taxes. Add other taxable income too.
Check these

Example numbers are filled in. Replace them with yours.

Common questions

How the overtime deduction works

From 2025 through 2028 you can deduct the extra pay you get for overtime that federal law requires. If you earn $20 an hour and get $30 for an overtime hour, only the extra $10 is deducted. The $20 is still taxed like regular pay.

  1. Find your overtime pay for the year. Your W-2 or final pay stub may show a separate qualified overtime amount.
  2. Divide time-and-a-half pay by 3 to get the extra half.
  3. Cap it at $12,500, or $25,000 on a joint return. The cap shrinks by $100 for every $1,000 of income over $150,000 ($300,000 joint).
  4. Subtract it from your income. Your tax drops by that amount times your bracket rate, usually 10% or 12% for most hourly workers.
Is all my overtime tax-free now?

No. Only the extra half of time-and-a-half counts, and it's a deduction, not an exemption. Social Security, Medicare and state taxes still apply. Many workers save a few hundred dollars a year.

Does overtime from my state or union contract count?

Only overtime required by the federal Fair Labor Standards Act counts, which means hours over 40 in a workweek. Daily overtime required only by state law, or extra premiums in a union contract, don't qualify.

I'm salaried. Do I qualify?

Only if you are nonexempt, meaning your employer must pay you overtime under federal law. Exempt salaried workers don't get FLSA overtime, so they have nothing to deduct.

Do I have to itemize?

No. You can take it with the standard deduction.

Will more overtime cut my SNAP or SSI?

It can. Benefits count your gross pay, and this tax deduction doesn't change that. Check the boxes in the calculator to see the effect.