No tax on overtime calculator (2025–2028)

Find your qualified overtime deduction: convert total overtime pay into the FLSA premium, apply the $12,500 / $25,000 cap and the MAGI phase-out.

Figures last checked 21 Oct 2026

Estimates only, not tax advice. Results are for general information. Your actual tax depends on your full return; check with the IRS or a qualified tax professional.

What does your pay stub or statement show?
Total for the tax year from your W-2 box 14, pay stubs or employer statement.
Modified adjusted gross income. For most people this is the adjusted gross income (AGI) on Form 1040 (line 11b on the 2025 form). Add back any foreign earned income or Puerto Rico income you excluded.
Enter your numbers to see the estimate.

What counts as qualified overtime

Only overtime pay required by the Fair Labor Standards Act (FLSA) counts, and only the part above your regular rate: the “half” in “time-and-a-half”. You must be covered by the FLSA and not exempt from its overtime rules. Overtime paid only because of a union contract or state law, or paid to an FLSA-exempt employee, does not count.

  • Years: 2025 through 2028.
  • Maximum: $12,500 a year ($25,000 on a joint return).
  • Phase-out: reduced by $100 for each full $1,000 of MAGI over $150,000 ($300,000 joint).
  • Valid Social Security number required; married people must file jointly; available with the standard deduction.
  • For 2025 employers did not have to report it separately; from 2026 they must report qualified overtime on Forms W-2 and 1099.

Turning total overtime pay into the qualified premium

  • If you were paid time-and-a-half and only know the total overtime pay, the premium is total ÷ 3. (1.5 × your rate, of which 0.5 is premium.)
  • If your employer pays double time, only the FLSA-required half counts: total ÷ 4.

IRS examples (IR-2025-114)

  • Andrew's payroll statement shows a $5,000 overtime premium: he uses $5,000. If it showed $15,000 of total overtime pay instead, he uses $15,000 ÷ 3 = $5,000.
  • Brad is paid double time and received $20,000 of overtime pay: he uses $20,000 ÷ 4 = $5,000.
  • Diane was paid $4,500 for compensatory time earned at time-and-a-half: she uses one-third, $1,500.

Worked example: married couple, MAGI $315,400

Qualified overtime premium (both spouses)$26,000
Capped at $25,000 (joint)$25,000
MAGI over $300,000$15,400
Full $1,000s: 15 × $100− $1,500
Deduction$23,500

A single filer with $9,000 of total time-and-a-half overtime pay and MAGI of $80,000 gets $9,000 ÷ 3 = $3,000.

Frequently asked questions

Is all my overtime pay tax-free?

No. Only the premium part required by the FLSA (usually one-third of time-and-a-half pay) can be deducted, up to the cap. The rest of your overtime pay is taxed normally.

I'm a salaried manager and get overtime. Does it count?

Only if you are covered by the FLSA and not exempt from its overtime requirement. Many salaried roles are exempt. Check the Department of Labor fact sheets linked from the IRS FAQ.

Where do I claim it?

On Schedule 1-A (Form 1040), Part III.

Do I need to itemize?

No. You can take it with the standard deduction.

Is my data stored?

No. Everything is calculated in your browser.

Official sources

Every figure on this page was checked against these official pages on 21 Oct 2026.