No tax on overtime calculator
See how much federal income tax the new overtime deduction could save you.
- Type your hourly rate and overtime hours.
- Pick your filing status.
- See your deduction and tax saving.
- Federal tax you save
- $390.00
- Your deduction
- $3,250.00
- Overtime premium (the “half”)
- $3,250.00
- All overtime pay
- $9,750.00
Estimate for federal income tax only, using the standard deduction. Social Security, Medicare and most state taxes still apply to overtime. The deduction is claimed on your tax return.
How the no tax on overtime deduction works
- It covers tax years 2025 to 2028.
- You deduct only the extra half of time-and-a-half overtime required by the Fair Labor Standards Act, not the whole overtime payment.
- The most you can deduct is $12,500 a year, or $25,000 if you file jointly.
- It shrinks by 100 for each $1,000 of income above $150,000 ($300,000 joint).
- It lowers federal income tax only. Social Security and Medicare are still taken from overtime pay.
- You need a Social Security number valid for work. If you are married you must file jointly.
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Frequently asked questions
Is overtime tax free now?
Not completely. From 2025 to 2028 you can deduct the extra “half” of time-and-a-half pay from federal taxable income, up to the yearly limit. Payroll taxes still apply.
What is the maximum no tax on overtime deduction?
$12,500 a year, or $25,000 for married couples filing jointly.
Do I still see tax taken from overtime on my paycheck?
Usually yes. The saving comes when you file your tax return and claim the deduction.
Where our numbers come from
- 26 U.S. Code § 225 – Qualified overtime compensation
- IRS – Questions and answers about the new deduction for qualified overtime compensation
Rates checked against official sources on 2026-09-29.