Work out your overtime rate, overtime pay and weekly total at time and a half or double time, and what the 2025–2028 overtime deduction may save you
Overtime is simple arithmetic with a few rules that decide which hours count. Enter your hourly rate and this week's hours, and the calculator shows the overtime rate, the overtime pay and the week's total, then estimates what the overtime would add over a year and how much federal income tax the new overtime deduction could save.
Under the federal Fair Labor Standards Act, a non-exempt employee must be paid at least 1.5 times their regular rate for every hour over 40 in a workweek. Overtime pay = hourly rate × 1.5 × overtime hours. Double time — twice the regular rate — is not required by federal law but is paid by some employers, union contracts and, in California, for hours over 12 in a day. The table shows the time-and-a-half rate and what ten overtime hours add to a week.
| Hourly rate | Overtime rate (1.5×) | Pay for 10 overtime hours | Week total (50 hours) |
|---|---|---|---|
| $15 | $22.50 | $225 | $825 |
| $18 | $27 | $270 | $990 |
| $20 | $30 | $300 | $1,100 |
| $25 | $37.50 | $375 | $1,375 |
| $30 | $45 | $450 | $1,650 |
| $40 | $60 | $600 | $2,200 |
Most hourly employees are non-exempt and must be paid overtime. Salaried employees can be exempt if their duties fit an executive, administrative or professional exemption and they earn at least the salary threshold the Department of Labor enforces, currently $684 a week ($35,568 a year) after the 2024 rule raising it was vacated. A salaried worker below that line is owed overtime just like an hourly one. Independent contractors are not employees and are not covered. Several states set stricter rules; California, for example, requires overtime for hours over eight in a day.
The rate that gets multiplied by 1.5 is the regular rate, which includes most non-discretionary bonuses, shift differentials and commissions earned in the week — not just the base hourly wage. A $20 base with a $2 night differential has a $22 regular rate, so overtime is $33 an hour, not $30. If a production bonus is paid, it is spread over all hours worked that week before the overtime premium is added.
The One, Big, Beautiful Bill Act created a federal deduction for qualified overtime compensation for 2025 through 2028: the premium part of FLSA-required overtime — the "half" in time and a half — up to $12,500 a year ($25,000 on a joint return). It shrinks by $100 for every $1,000 of modified adjusted gross income above $150,000 ($300,000 joint). It lowers federal income tax only; Social Security, Medicare and most state taxes still apply to all overtime pay. It is claimed on the tax return, so paycheck withholding may not reflect it. Only the FLSA-required premium qualifies, so for double time the calculator counts the half-time portion.
An overtime hour pays 50% more than a regular hour, but it is also the most tired hour of your week. If you are taking overtime to reach a savings target, divide the target by the after-tax value of one overtime hour to see how many hours it takes, and compare that with a side income that you control. The overtime-versus-side-hustle calculator on this site does that comparison.
Multiply your regular hourly rate by 1.5. At $20 an hour, time and a half is $30 an hour, and 10 overtime hours pay $300.
Twice the regular rate: $40 an hour for someone paid $20. Federal law requires only time and a half; double time comes from state law (such as California after 12 hours in a day), a contract or company policy.
No. Overtime is taxed at the same rates as other wages. A large overtime week can be withheld at a higher rate because payroll assumes every week looks like that one, but the difference comes back when you file.
Partly. For 2025–2028 the premium portion of FLSA-required overtime can be deducted for federal income tax, up to $12,500 ($25,000 joint), phasing out above $150,000 of income ($300,000 joint). Social Security, Medicare and state taxes still apply.
Salaried employees earning less than $684 a week, or whose duties do not meet an exemption, must be paid overtime. Many salaried professionals and managers above that line are exempt.
Tax rules, limits and pay data change. Check the current figures with the primary source before acting on them.