Overtime Tax Calculator
Enter your wage and overtime hours to see the tax taken from overtime pay and what you keep, with the federal overtime deduction estimated below.
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Your marginal bracket (10–37%). Employers often withhold a flat 22% from separate bonus-style pay.
- Federal income tax
- $82.50
- Social Security
- $23.25
- Medicare
- $5.44
- State tax
- $18.75
How this was calculated
- Overtime rate = 25.00 × 1.5 = 37.50 per hour.
- Gross overtime = 37.50 × 10 hours = 375.00.
- Federal income tax = 375.00 × 22% = 82.50.
- Social Security 6.2% = 23.25, Medicare 1.45% = 5.44.
- State tax = 375.00 × 5% = 18.75.
- Net overtime = 375.00 − 129.94 = 245.06.
Federal overtime deduction (2025–2028)
The extra half of time and a half is deductible from federal income tax up to a cap. Enter how many weeks a year you work this much overtime.
- Yearly overtime premium
- $3,250.00
- Deductible
- $3,250.00
- Federal tax saved
- $715.00
Estimate only: it ignores the income phase-out above $150,000 ($300,000 joint) and your other deductions. Educational, not tax advice.
How overtime is taxed
Overtime is not taxed at a special higher rate. It is ordinary wages that are added to the rest of your income, so it is taxed at your marginal federal rate plus Social Security (6.2%), Medicare (1.45%) and any state income tax. This overtime tax calculator applies those rates to the overtime pay alone. At $25 an hour, 10 hours of time and a half pay $375. With 22% federal tax, 7.65% payroll tax and 5% state tax, $82.50 + $28.69 + $18.75 = $129.94 goes to tax and $245.06 is yours.
Why overtime checks look heavily taxed
Payroll systems withhold from each paycheck as if that pay would last all year. A larger check can push the withholding calculation into a higher bracket, and when overtime is paid separately employers may withhold a flat 22% under the IRS supplemental wage rules (Publication 15). Your actual tax is settled on your tax return, where only the part of your income above each bracket threshold is taxed at the higher rate. If too much was withheld you get it back as a refund, which is why overtime feels taxed twice but is not.
The federal overtime deduction for 2025 to 2028
Under the One Big Beautiful Bill Act, the extra half of time and a half (the premium above your regular rate, required by the Fair Labor Standards Act) can be deducted from federal income tax for tax years 2025 through 2028, up to $12,500 for a single filer or $25,000 on a joint return. The deduction phases out above $150,000 of modified adjusted gross income ($300,000 joint). It lowers income tax only, not Social Security or Medicare tax. At $25 an hour, 10 overtime hours a week for 26 weeks is a premium of $12.50 × 10 × 26 = $3,250, which saves $715 at a 22% rate. Check the IRS guidance for your year before relying on the figure.
Common mistakes
Use your marginal bracket, not your average rate, and add your state rate if your state taxes wages. Local taxes, pre-tax deductions such as 401(k) contributions and some state overtime rules are not modeled. To see overtime pay before tax, use the overtime calculator; for a full take-home figure use the paycheck calculator.
Frequently asked questions
Is overtime taxed at a higher rate?
No. Overtime is ordinary wages taxed at your marginal rate. It can look higher because payroll withholding treats a larger check as if it were earned all year.
How much tax is taken from overtime?
Federal income tax at your bracket (such as 22%), 7.65% Social Security and Medicare, and state tax. At 22% federal and 5% state the total is about 34.65% of the overtime pay.
Why is the withholding on my overtime check so high?
Employers may withhold a flat 22% on supplemental wages, and a bigger check can raise the amount withheld. Any excess comes back as a refund when you file.
Is there a federal tax deduction for overtime?
For tax years 2025–2028 the premium part of overtime (the extra half in time and a half) is deductible up to $12,500, or $25,000 on a joint return, with a phase-out above $150,000 ($300,000 joint) of income. It does not reduce Social Security or Medicare tax.
Does the deduction apply to double time?
Only the part required by federal overtime law counts, which is the half above the regular rate. Pay above time and a half is not covered.