How Much Overtime Pay Do You Actually Keep?
See what your overtime is worth after tax. Stacks overtime on your regular wages for a true 2026 marginal rate, FICA, and the no-tax-on-overtime deduction.
How Much Overtime Pay Do You Actually Keep?
Your overtime
Enter your pay rate and hours, pick your multiplier and filing status, then add a state estimate.
Use a flat estimate; 0 if no state income tax.
Advanced: Social Security already paid
Pre-filled from your regular annual wages (capped at the $184,500 wage base). Override if your year-to-date wages differ.
Section 225(e) requires a joint return. Married filers who file separately cannot claim the overtime deduction at all, so it is $0 here no matter how much qualifying premium you earn.
Your overtime pushes past the $184,500 Social Security wage base, so Social Security on the overtime slice is reduced or zero (an employer may still withhold it and refund it at filing).
2026 estimate using the federal brackets, the $184,500 Social Security wage base, and a flat state rate. Not filing-grade: it excludes local taxes, credits, itemized deductions, and 1099 self-employment tax.
How overtime take-home pay is actually calculated (it stacks on top)
Overtime does not start a fresh tax calculation from zero. It stacks on top of your regular wages, so the first overtime dollar is taxed at whatever bracket your regular pay already reached. Overtime is the top slice of your income, which is why a flat withholding rate gives the wrong answer. To isolate the tax on that slice, this tool figures the federal tax on your regular wages plus overtime, then subtracts the federal tax on your regular wages alone. What is left is the tax on the overtime alone.
This also settles the "overtime is taxed higher" myth. There is no special overtime rate. Your overtime is taxed at your marginal rate, the rate on your next dollar, which is usually higher than your average (effective) rate because your average blends every bracket from 10% up. Separately, your employer may withhold overtime as supplemental wages at a flat 22% federal rate. That is a withholding shortcut, not your final liability, and any extra comes back at filing.
The 2026 "no tax on overtime" deduction, explained
The One Big Beautiful Bill Act added a federal deduction for overtime for tax years 2025 through 2028. It applies only to the FLSA-required premium, the "half" in time and a half, not the whole overtime check. It is capped at $12,500 (single) or $25,000 (married filing jointly) and phases out above $150,000 or $300,000 of modified adjusted gross income, dropping by $100 for each full $1,000 over the threshold, so a partial thousand costs you nothing until it is complete. Married taxpayers have to file jointly to claim it: section 225(e) leaves married filing separately with no deduction at all, not a smaller one. It reduces federal income tax only: Social Security and Medicare still apply to every overtime dollar, and states can still tax it.
The multiplier changes how much qualifies. On time and a half, the qualifying premium is one third of the overtime pay (the 0.5x sitting on top of the 1.0x base). On double time, only the FLSA-required 0.5x counts, not the full extra 1.0x your contract adds, so just one quarter of the overtime pay qualifies. Toggle the deduction above to see the tax it saves on your own numbers, and watch the cap bind once your qualifying premium clears $12,500 or $25,000.
Your real after-tax overtime rate (is the extra shift worth it?)
The number that actually decides whether a shift is worth it is your after-tax pay per overtime hour. Take a single filer at $25/hr working 40 regular hours plus 10 overtime hours a week at time and a half, with no state tax. Gross overtime runs about $19,500 a year. Federal marginal tax and FICA come off the top, the premium portion gets the 2026 deduction, and what is left is the take-home this tool reports, divided down to a real dollars-per-hour figure and a cents-kept rate.
Federal tax at your marginal bracket and FICA (6.2% Social Security up to the wage base, plus 1.45% Medicare) are the fixed layers; the flat state rate you enter is the last slice. Once you can see the after-tax hourly rate, comparing an overtime shift against your time is a lot clearer. To weigh a separate side job on the same stacking logic, use the Second Job Take-Home Calculator, or work backward from a target take-home with the Net to Gross Salary Calculator.
From estimate to exact: model your full paycheck in Salary Calculator
This web tool is a fast estimate for deciding whether overtime pays off. It uses a flat state rate and annualized weekly hours, so it leaves out per-state details, the full W-4, and pre-tax deductions. For per-state withholding (including CA SDI and NY PFL), multiple overtime entries per profile, 401(k) and HSA contributions, year-to-date FICA, and saved profiles for comparing shifts and offers, download the Stub44 Salary Calculator app. If your household stacks two incomes, the Two-Income Household Take-Home Calculator covers that case.
Frequently Asked Questions
Common questions about how much overtime pay do you actually keep?
Is overtime taxed higher than regular pay?
No. There is no special overtime tax rate. Overtime is taxed at your normal marginal rate, the same rate that applies to your next dollar of regular pay. It can feel higher because a bigger paycheck often triggers more up-front withholding: employers commonly withhold overtime as supplemental wages at a flat 22% federal rate. That is a withholding estimate, not your actual tax, and any over-withholding comes back as a refund when you file.
What is the "no tax on overtime" deduction for 2026, and how much can I deduct?
The One Big Beautiful Bill Act created an above-the-line federal deduction (tax years 2025 to 2028) for the FLSA-required premium portion of overtime, meaning the "half" in time and a half rather than the whole overtime check. It is capped at $12,500 for single and head of household filers and $25,000 for married filing jointly, and it phases out above $150,000 (single) or $300,000 (joint) of modified adjusted gross income by $100 for each full $1,000 over the line. Section 225(e) requires a joint return, so a married taxpayer filing separately gets nothing. You can claim it whether or not you itemize. This tool applies the cap and the phaseout for you when the toggle is on.
Does the no-tax-on-overtime deduction eliminate all tax on my overtime?
No, for two reasons. It covers only the premium half, not the base rate on your overtime hours, and it reduces federal income tax only. Social Security and Medicare (7.65% FICA together) still apply to every overtime dollar, and many states still tax the full amount. So even with the deduction on, you keep less than 100 cents per overtime dollar.
How is time and a half calculated?
Your regular hourly rate multiplied by 1.5 for each hour worked over 40 in a workweek, per the FLSA. At $20/hr, time and a half is $30/hr. Double time (2x) works out to $40/hr and is set by contract or state law rather than required federally. Enter your rate and multiplier above to see the gross and the take-home.
How much of my overtime do I actually take home?
Usually 65 to 80 cents per gross overtime dollar before state tax, depending on your bracket and whether the 2026 overtime deduction applies. This tool shows your exact keep rate and your after-tax pay per overtime hour so you can decide whether an extra shift is worth it. To weigh a side gig on the same marginal-stacking basis, see the Second Job Take-Home Calculator.
Will working overtime push me into a higher tax bracket and cost me money?
No. Brackets are marginal, so only the dollars that land inside a higher bracket are taxed at the higher rate, never your whole income. Working more overtime always leaves you with more take-home, even if the keep rate on the top dollars drops slightly.
Why did my overtime paycheck get withheld so heavily?
Employers often withhold overtime as supplemental wages at a flat 22% federal rate, on top of Social Security and Medicare. That is a withholding estimate, not your final tax bill. If it is more than you actually owe at your real marginal rate, the difference comes back as a refund when you file.
Is double time taxed differently from time and a half?
No. Both are taxed at your ordinary marginal rate plus FICA. One thing to note: the 2026 overtime deduction only covers the FLSA-required 0.5x premium, so on a 2x rate only a quarter of the overtime pay qualifies for the deduction, while on time and a half a third of the pay qualifies. The extra 0.5x your contract adds on double time is fully taxable.