Is overtime pay taxed at a higher rate?

No — overtime pay is taxed at the same marginal rate as your regular wages, not a special "overtime rate." Because US income tax uses progressive brackets, a large paycheck with significant overtime may push more of your income into a higher bracket for that period, but your annual effective rate is unchanged. Withholding on large overtime checks can look high, but any over-withholding is refunded at tax time.

What is "no tax on overtime" — is it law?

The "no tax on overtime" proposal is a policy idea that has been discussed at the federal level, but as of 2026 it has not been enacted into law. Under current federal tax law, overtime wages are ordinary income and subject to the same federal income tax, Social Security (6.2%), and Medicare (1.45%) as regular pay. Check IRS.gov and current congressional updates for the latest status of any proposed legislation.

What is time and a half?

Time and a half means the employee earns 1.5× their regular hourly rate for each overtime hour. Under the Fair Labor Standards Act (FLSA), most non-exempt employees must receive time-and-a-half for all hours worked beyond 40 in a single workweek. For example, a worker earning $20/hour receives $30/hour for each overtime hour.

How do I calculate my overtime take-home pay?

Enter your regular hourly rate and hours per week in this calculator, then enable the Overtime toggle. Choose time and a half (1.5×), double time (2×), or a custom multiplier, and enter your overtime hours. The calculator adds your overtime earnings to your regular pay, applies federal and state income tax brackets, FICA, and pre-tax deductions to show your exact net take-home per paycheck and annually.

Does overtime affect Social Security and Medicare withholding?

Yes — both Social Security (6.2%) and Medicare (1.45%) are withheld on every dollar of overtime pay, just as they are on regular wages. Social Security has an annual wage base ($184,500 in 2026); once you hit it, no further Social Security is withheld regardless of additional overtime. Medicare has no cap, and earners above $200,000 pay an extra 0.9% surtax.

Who is eligible for overtime under the FLSA?

The FLSA covers most hourly workers plus salaried employees earning below the exempt salary threshold (currently $1,128/week or $58,656/year in 2026). Employees classified as executive, administrative, professional, or certain outside-sales roles may be exempt. Independent contractors are not covered by FLSA overtime rules at all. Always confirm with your employer or the Department of Labor if you believe you are owed overtime pay.

Do all states follow the federal overtime rules?

Most states follow the federal FLSA minimum of time and a half after 40 hours per week. A handful of states impose stricter rules: California requires overtime after 8 hours in a single day (not just 40 hours per week) and double time after 12 hours in a day. Alaska also uses a daily overtime threshold. The federal FLSA sets the floor — states can be more generous but cannot be less protective.

Overtime Tax Calculator — Time and a Half & Net Pay

Estimates federal tax, state tax, FICA, and net take-home pay on overtime wages — supports time and a half, double time, and custom rates.

How to Use This Overtime Tax Calculator

This overtime tax calculator estimates your net take-home pay and annual tax liability when you work overtime hours. The calculator opens in hourly mode — enter your regular hourly rate and standard hours per week, then toggle on Overtime and enter your overtime hours. Choose time and a half (1.5×), double time (2×), or a custom multiplier — the calculator adds your overtime earnings to regular pay and applies federal income tax, state income tax, and FICA to show your exact per-paycheck and annual net pay.

For the most accurate results, also enter your state, filing status, and any pre-tax deductions such as 401(k) contributions or health insurance premiums.

How Overtime Pay Is Taxed

Overtime wages are taxed exactly like regular wages— there is no special "overtime tax rate." Federal income tax uses a progressive bracket system, which means higher earnings push income into higher brackets, but only the dollars inside each bracket are taxed at that bracket's rate.

Why a Large Overtime Check Looks Like It Was Taxed More

When you receive a paycheck with a large overtime component, your employer annualizes the per-period amount to determine withholding. A single large check may temporarily place your annualized income in a higher bracket, causing more federal tax to be withheld that pay period. This over-withholding is corrected at tax time — you either receive a refund or owe less. Your effective annual rate does not change just because of overtime.

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Time and a Half: How It Works

Under the federal Fair Labor Standards Act (FLSA), most non-exempt employees must be paid at least 1.5× their regular rate for every hour worked beyond 40 in a single workweek. This is called time and a half.

Time and a Half Example

A worker earning $22/hour works 48 hours in a week (40 regular + 8 overtime):

Regular pay: 40 × $22 = $880
Overtime pay (1.5×): 8 × $33 = $264
Gross pay for the week: $1,144
Federal income tax (weekly pay, single): roughly $96
FICA (7.65%): ~$88
Estimated net: ~$960 (before state tax and deductions)

Use the calculator above to run your exact numbers with your state and deductions factored in. For an annual estimate, see the income tax calculator.

Double Time and Custom Overtime Rates

Some employers pay double time (2×) for hours beyond 12 in a single day, holiday work, or other special circumstances. California law also requires double time for hours beyond 12 in a day and for the first 8 hours on a seventh consecutive workday in the same workweek. This calculator supports double time and any custom multiplier you enter.

FICA Taxes on Overtime Pay

Social Security and Medicare (FICA) are withheld on all overtime wages at the same rate as regular wages:

Social Security: 6.2% on wages up to the 2026 wage base of $184,500. If you hit the wage base mid-year because of heavy overtime, no further Social Security is withheld for the rest of the year.
Medicare: 1.45% on all wages with no cap. Earners above $200,000 ($250,000 for married filing jointly) also pay an additional 0.9% Medicare surtax.

FICA applies to every dollar of overtime. There is currently no exemption for overtime wages from Social Security or Medicare taxes under federal law.

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Who Qualifies for Overtime Under the FLSA?

The Fair Labor Standards Act covers most US workers, but exemptions apply:

Non-exempt employees (hourly workers and salaried employees below $1,128/week) are entitled to FLSA overtime.
Exempt employees — those earning above the salary threshold in executive, administrative, professional, or certain outside-sales roles — are not covered by federal overtime requirements.
Independent contractors are not employees under the FLSA and have no federally mandated overtime pay.

State laws may provide broader protections than the federal minimum. California, for instance, requires overtime after 8 hours in a single day. Check your state's labor department website for state-specific overtime rules.

State Income Tax on Overtime

State income tax applies to overtime wages the same way it applies to regular wages — there is no state-level overtime exemption either. Use the state selector in the calculator above to include state withholding in your estimate. Workers in no-income-tax states (Texas, Florida, Nevada, Wyoming, etc.) owe no state income tax on any wages, including overtime. See the paycheck calculator for a full list of state tax rates.

Tax Disclaimer

This calculator provides estimates for informational purposes only. It is not tax or legal advice. Overtime eligibility, FLSA exemptions, and state labor law rules can change. Federal tax rules and FICA wage bases are updated annually. Consult a qualified tax professional or your state's labor department for guidance on your specific situation.

Sources & References

Fair Labor Standards Act (FLSA): Overtime Pay Requirements — U.S. Department of Labor
IRS Publication 15-T: Federal Income Tax Withholding Methods — Internal Revenue Service
Social Security Contribution and Benefit Base — Social Security Administration

Overtime Tax Calculator