Know your overtime rights
- Federal (FLSA): non-exempt employees must be paid at least 1.5× their regular rate for all hours worked over 40 in a workweek. (U.S. Department of Labor, dol.gov.)
- California: 1.5× for hours over 8 in a workday (up to 12), double time for hours over 12 in a workday, plus special rules for the 7th consecutive day of work. Verified against the California Department of Industrial Relations overtime FAQ (dir.ca.gov/dlse/faq_overtime.htm).
- Other states have their own rules layered on top of federal law — check your state's labor department for the specifics where you work.
- Exemptions exist: many salaried "exempt" workers (executive, administrative, professional roles meeting federal criteria) aren't entitled to overtime. Classification depends on actual job duties, not just the word "salary" in your offer letter.
This is general information, not legal advice. If you believe you're owed unpaid overtime, the DOL's Wage and Hour Division or an employment attorney in your state can advise on your situation.
How overtime pay is calculated
- Regular pay = hourly rate × regular hours
- Overtime (1.5×) = hourly rate × 1.5 × overtime hours
- Double time (2×) = hourly rate × 2 × double-time hours
The take-home estimate annualizes your weekly gross (× 52), applies the 2026 federal figures — single-filer brackets (10%–37%) above the $16,100 standard deduction, Social Security 6.2% on the first $184,500, Medicare 1.45% on all wages — then divides back to a weekly figure. It's an estimate of the annual tax liability on one week's pay, annualized — not a payroll-accurate withholding calculation. Your employer's withholding will differ.
The 2026 "no tax on overtime" deduction
A 2025 federal law (the One Big Beautiful Bill Act) created an above-the-line federal income tax deduction for the premium portion of FLSA overtime — the extra half in "time-and-a-half" — for tax years 2025–2028. This calculator applies it automatically:
- What qualifies: only the 0.5× premium on overtime required by the federal Fair Labor Standards Act (hours over 40/week for non-exempt workers). The straight-time portion of overtime pay is still fully taxable.
- Cap: $12,500 per year (single filer; $25,000 joint). This page models single filers.
- Phaseout: reduced above $150,000 MAGI (single).
- Still taxed: Social Security and Medicare apply to all overtime wages — the deduction only reduces federal income tax. Most state income taxes still apply too.
- Who's out: exempt salaried workers, independent contractors, and overtime required only by state law (not federal) don't qualify.
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Frequently asked questions
Is overtime taxed at a higher rate?
No — there's no special "overtime tax." Overtime is taxed exactly like regular wages. The confusion comes from withholding: extra income can push a paycheck into a higher marginal bracket, so each overtime dollar keeps slightly less than your regular dollars. Your actual tax rate on it is just your normal marginal rate.
Is overtime really tax-free in 2026?
Not exactly — it's a deduction, not an exemption. The 2025 "One Big Beautiful Bill" lets eligible workers deduct the premium half of FLSA overtime (the extra 0.5×) from their federal taxable income, up to $12,500/year single ($25,000 joint), phasing out above $150k/$300k MAGI. The straight-time portion stays taxable, and Social Security/Medicare still apply to all of it. This calculator applies the deduction automatically — look for the "2026 overtime tax deduction" line in your results. The savings arrive when you file your return (bigger refund or smaller balance), not in your weekly paycheck — unless you adjust your withholding.
Who qualifies for overtime pay?
Under the federal Fair Labor Standards Act, "non-exempt" employees must get 1.5× for hours over 40/week. Many salaried workers are classified as exempt and don't get overtime — but the classification depends on your actual job duties and pay level, not your title. When in doubt, the DOL's Wage and Hour Division can clarify.
How is double time calculated?
Simply double your regular hourly rate for each double-time hour. In California, double time is legally required for hours worked over 12 in a single workday (and for hours over 8 on the 7th consecutive day of work), per the state Department of Industrial Relations.
Do bonuses or shift differentials change my overtime rate?
They can. Legally, overtime is based on your "regular rate," which includes most non-discretionary bonuses and shift differentials — not just your base hourly rate. This calculator uses your base rate only, so if you earn those extras, your true overtime rate may be slightly higher.
My state isn't California — what overtime rules apply to me?
At minimum, the federal FLSA rule: 1.5× over 40 hours/week for non-exempt workers. Several states add their own twists (daily overtime, higher salary thresholds for exemption). Check your state labor department's website for the rules where you work.
What if my employer isn't paying me overtime I'm owed?
Start by raising it with your employer or HR — payroll errors happen. If that doesn't resolve it, you can file a complaint with the U.S. Department of Labor's Wage and Hour Division or consult an employment attorney in your state. Keep your own records of hours worked.
Methodology
Federal figures are the 2026 IRS inflation adjustments (single-filer brackets: 10% to $12,400; 12% to $50,400; 22% to $105,700; 24% to $201,775; 32% to $256,225; 35% to $640,600; 37% above; $16,100 standard deduction) and the 2026 Social Security wage base of $184,500. The 2026 overtime deduction follows OBBBA §70202 and IRS Fact Sheet FS-2026-13 (Aug. 2026): above-the-line deduction for the FLSA 0.5× premium, capped at $12,500 single with phaseout above $150,000 MAGI; FICA unaffected. Weekly gross is annualized for the tax estimate and divided back to weekly. Overtime rights summarized from the FLSA and the California DIR overtime FAQ. Estimates only — not tax or legal advice.