Overtime pay reference (time and a half)
| Regular rate | OT rate (1.5×) | 5 OT hrs/wk | 10 OT hrs/wk | 10 OT hrs/wk, annual |
|---|---|---|---|---|
| $15.00 | $22.50 | $112.50 | $225.00 | $11,700 |
| $18.00 | $27.00 | $135.00 | $270.00 | $14,040 |
| $20.00 | $30.00 | $150.00 | $300.00 | $15,600 |
| $25.00 | $37.50 | $187.50 | $375.00 | $19,500 |
| $30.00 | $45.00 | $225.00 | $450.00 | $23,400 |
| $35.00 | $52.50 | $262.50 | $525.00 | $27,300 |
Overtime rules in 2026
Under the federal Fair Labor Standards Act (FLSA), non-exempt employees must receive at least 1.5× their regular rate for hours worked beyond 40 in a workweek. Some states go further: California, for example, requires daily overtime after 8 hours and double time after 12 hours in a day. Exempt salaried employees (generally executive, administrative, and professional roles above a salary threshold) are not entitled to overtime.
A major recent change: under the One Big Beautiful Bill Act, workers can deduct up to $12,500 of qualified overtime premium pay ($25,000 for joint filers) from federal taxable income for tax years 2025 through 2028, even without itemizing. The deduction applies to the premium portion — the extra "half" in time-and-a-half — and phases out at higher incomes. This makes overtime hours meaningfully more valuable after tax than they were before 2025.
Related calculators
Convert your new weekly total to annual terms with the hourly to salary calculator, then see the after-tax picture in the take-home pay calculator.
Frequently asked questions
How is overtime pay calculated?
Multiply your regular hourly rate by 1.5 for every hour beyond 40 in a workweek (federal FLSA rule for non-exempt employees). A $22/hour worker earns $33/hour for overtime. Some states also require daily overtime — California mandates 1.5× after 8 hours in a day and 2× after 12.
Is overtime taxed at a higher rate?
No — overtime is ordinary income taxed at your normal marginal rates. It can feel more heavily taxed because a bigger paycheck triggers higher percentage withholding that pay period, but it settles out when you file. Better still, through 2028 up to $12,500 of the overtime premium ($25,000 joint) is federally deductible under the One Big Beautiful Bill Act.
What is the overtime tax deduction for 2026?
For tax years 2025–2028, eligible workers can deduct up to $12,500 ($25,000 married filing jointly) of qualified overtime premium pay — the extra 'half' in time-and-a-half — from federal taxable income without itemizing. The deduction phases out for higher earners (starting at $150,000 modified AGI, $300,000 joint).
Who is exempt from overtime?
Salaried employees in genuine executive, administrative, professional, outside-sales, and certain computer roles who earn above the FLSA salary threshold are exempt. Job title alone doesn't decide it — duties and salary level do. Most hourly workers are non-exempt and must receive overtime.