No tax on overtime calculator
Estimate what the new federal overtime deduction could save you at tax filing, based on your qualifying overtime premium pay.
The 2026 federal deduction applies to your overtime premium — the extra half in time-and-a-half — not your full overtime wages.
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Quick presets
Which overtime number do you know?
Filing status
Sets the deduction cap: $12,500 single, $25,000 married filing jointly.
Marginal federal tax bracket
The bracket your last dollar of income falls in. Most staff nurses land in the 22% or 24% bracket.
Estimate only, not tax advice. This is a deduction that reduces taxable income when you file — it does not change paycheck withholding, so the savings show up at tax filing, not per paycheck. It reduces federal income tax only; FICA and state taxes still apply. Only FLSA-required overtime (over 40 hours/week) qualifies. Confirm your situation with current IRS guidance or a tax professional.
Under the One Big Beautiful Bill Act (OBBBA), workers can deduct the premium portion of qualified overtime pay from their federal taxable income for tax years 2025 through 2028. The premium portion is the extra half in time-and-a-half: if your base rate is $38 per hour and your overtime rate is $57, the deductible premium is $19 for each overtime hour, not the full $57.
The deduction is capped at $12,500 for single filers and $25,000 for married couples filing jointly, and it phases out for households with modified adjusted gross income above $150,000 (single) or $300,000 (joint). Enter your overtime pay, filing status, and marginal tax bracket to estimate the federal income tax you could get back at filing.
This calculator is an estimate only. It is not tax, legal, payroll, or financial advice. Your actual paycheck can vary based on your employer, benefits, withholding, state taxes, local taxes, and payroll rules.
A nurse at $38/hr picking up 12 overtime hours a week earns a $19/hr premium on those hours: about $11,856 of deductible premium over a full year. At a 22% marginal rate, that is roughly $2,608 of federal tax saved at filing.
One 12-hour OT shift a month at $38/hr generates about $2,736 of premium pay a year. At 22%, that is roughly $600 back at filing.
A married couple filing jointly with $30,000 of combined overtime premium can only deduct the $25,000 cap. At 24%, that is $6,000 of estimated federal tax saved.
Differentials, premiums, and paycheck math are connected. These pages answer the next question most people have.
Who qualifies, the $12,500/$25,000 caps, the income phase-out, and worked examples.
Open →Why the big OT check looks over-taxed, and why it evens out at filing.
Open →Estimate a pickup shift with overtime, differentials, and estimated taxes.
Open →Not quite the right question? Open another calculator and compare the numbers from a different angle.
Estimate a pickup shift with overtime, differentials, incentives, and taxes.
Model one extra shift before you commit the time and energy.
Compare take-home pay with commute, meals, childcare, and other costs.
Estimate a full two-week check with hours, overtime, deductions, and taxes.
Not exactly. The deduction covers only the premium portion of qualified overtime, the extra half in time-and-a-half, up to $12,500 (single) or $25,000 (married filing jointly). Regular wages, the straight-time portion of OT, FICA, and state taxes are unchanged.
No. This is a deduction claimed on your tax return, not a withholding change. Paychecks look the same all year; the benefit shows up as a lower tax bill or bigger refund at filing.
Overtime required by the federal FLSA, generally hours over 40 in a workweek. If your hospital pays overtime after 36 hours by policy, the premium on hours 37 to 40 may not qualify.
The deduction phases out above $150,000 modified adjusted gross income for single filers and $300,000 for married filing jointly, shrinking by $100 for every $1,000 over the threshold.
No. It is a planning estimate only. Confirm your situation with current IRS guidance or a tax professional.