Enter your hourly rate, regular hours, and overtime hours to see exactly what you take home after all taxes.
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Overtime is legally required at 1.5x your regular rate for hours over 40/week under the federal Fair Labor Standards Act (FLSA). While there is no special "overtime tax rate," the extra income increases your annualized earnings for withholding purposes, which can temporarily push your per-check withholding into a higher bracket than usual.
Payroll software annualizes each paycheck to calculate withholding. If you normally earn $1,760/biweek at $22/hour (40 hrs) and work 10 overtime hours one week at $33/hour, your gross jumps to $2,090. The payroll system treats this as if you'll earn $2,090 × 26 = $54,340 annually, pushing more income into the 22% bracket versus 12%. Your actual year-end tax is based on true annual income — any over-withholding is refunded. For workers using our hourly paycheck calculator, set your hours to your overtime total to model a heavy week.
Regular pay: 40 hrs × $22 = $880. Overtime pay: 10 hrs × $33 = $330. Total gross for the week: $1,210. After taxes (single filer, Ohio), this week's take-home is approximately $909 — versus $671 for a standard 40-hour week. The 10 overtime hours added $330 gross but only $238 net, representing a 72% take-home rate on those extra hours, slightly lower than the regular rate because of higher withholding. Over a full year of regular overtime, the true effective rate balances out. See the paycheck calculator to model a full-year scenario with consistent overtime.
Some workers avoid overtime because they believe they'll keep less per dollar. Mathematically, this is never true — even in the highest tax bracket, you always keep at least 63 cents of every overtime dollar after federal taxes. In most brackets, you keep 78–85 cents per overtime dollar. The marginal value of overtime is always positive. Use this calculator to see exactly what you'll net for any overtime scenario before making a decision.
Under the federal FLSA, overtime is any hours worked over 40 in a workweek, paid at a minimum of 1.5x the regular hourly rate. For a worker earning $20/hour, overtime rate is $30/hour. Some employers pay double time (2x) for certain hours or holidays, though this isn't federally required for most workers. State laws may provide additional protections — California, for example, requires overtime after 8 hours in a single day, not just 40 in a week. Salaried workers earning less than $684/week ($35,568/year) are also entitled to overtime under the 2024 FLSA rules. Use our paycheck calculator for salaried overtime scenarios.
You pay the same marginal tax rate on overtime income as on regular income — there is no special overtime tax. However, because overtime increases your total earnings, more of your income may fall into higher marginal brackets. A single filer earning $46,000 in regular wages is mostly in the 12% federal bracket. Working enough overtime to push total wages to $52,000 means the extra $6,000 is taxed at 22%. You still keep more money by working overtime — the effective tax rate on overtime dollars is always lower than the marginal rate because you've already paid lower rates on earlier income.
Several states provide overtime protections beyond the federal 40-hour threshold. California requires overtime for hours over 8 per day or 40 per week, plus double time after 12 hours in a day. Alaska and Nevada also require daily overtime after 8 hours. Some states have higher minimum thresholds for exempt salaried employees. Colorado, Washington, and several other states have established higher salary thresholds for overtime exemption. For hourly workers in these states, overtime eligibility is often more frequent than the federal standard. Use our hourly paycheck calculator to model your specific state's take-home.
Each dollar of overtime you earn throughout the year is taxed as regular income — there's no penalty or special rate at filing time. If your overtime income pushed your withholding higher than necessary during the year (because payroll annualized your higher weeks), you'll receive a refund for the over-withheld amount when you file your return. If overtime is predictable and consistent throughout the year, your withholding should fairly closely match your actual tax. To optimize withholding when you regularly work overtime, use the tax withholding calculator to update your W-4 for your expected total annual income.
Last updated: January 2025
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