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No Tax on Overtime Deduction Calculator

For 2025 through 2028 you can deduct the extra "half" of FLSA-required time-and-a-half overtime pay: up to $12,500, or $25,000 on a joint return. This calculator works out that premium from your hourly rate and overtime hours.

Not tax advice. This calculator gives educational estimates based on 2026 federal rules published by the IRS and SSA. It ignores state taxes and many credits and special situations. Check with a tax professional or the IRS before filing or paying.
Last reviewed: October 29, 2026.

How we calculate it

Qualified overtime premium = regular rate × 0.5 × FLSA overtime hours. Only overtime the FLSA requires counts; overtime paid under state law or a union contract doesn't. The deduction is capped at $12,500 ($25,000 joint) and drops by $100 for each $1,000 of MAGI over $150,000 ($300,000 joint). Married filing separately can't claim it. Payroll taxes still apply.

Worked example

Example: $20/hour regular rate and 300 overtime hours. Premium: $20 × 0.5 × 300 = $3,000 deductible, if your MAGI is under $150,000.

FAQ

Is all my overtime pay deductible?

No. Only the premium above your regular rate (usually the "half" in time-and-a-half) that the FLSA requires.

What is the maximum overtime deduction?

$12,500 per year, or $25,000 for married filing jointly, phased out above $150,000 MAGI ($300,000 joint).

Do I need to itemize?

No. It is available whether you itemize or take the standard deduction.

Sources

Last reviewed October 29, 2026 by the Self Employed Math editorial team against the sources above.