No Tax on Overtime Calculator
Calculate your potential tax savings under the "One Big Beautiful Bill Act" for tax years 2025-2028. This calculator implements the official federal overtime tax deduction based on H.R.1, Section 70202.
Your tax filing status determines deduction limits and phase-out thresholds
Your total annual income before taxes. Must be under $160,000 to qualify.
Your regular hourly wage rate (not including overtime premium)
Hours worked beyond 40 hours per week on average
Number of weeks you work overtime per year (typically 50-52)
Click 'Calculate Tax Savings' to see your results
Overtime Premium Calculation
Only the 50% overtime premium (not the full overtime pay) is eligible for the deduction
Apply Deduction Limits
Maximum deduction: $12,500 (single) or $25,000 (married filing jointly)
Income Phase-out
Deduction phases out for higher incomes: $150K/$300K thresholds
Important Disclaimer
This calculator provides estimates based on the "One Big Beautiful Bill Act" (H.R.1, Section 70202) for tax years 2025-2028. Actual tax savings may vary based on individual circumstances, changes in tax law, and IRS implementation guidance. This tool is for educational purposes only and should not be considered professional tax advice. Consult with a qualified tax professional for personalized guidance. The deduction only applies to federal income tax - FICA taxes (Social Security and Medicare) still apply to all overtime pay.
Help us improve the calculator by sharing your thoughts and suggestions.
No Tax on Overtime Calculator - Calculate Your Tax Savings
With the new act now law, the U.S. federal tax code has changed significantly for the 2025-2028 tax years. For the first time, working Americans can deduct a portion of their overtime pay from their taxable income using tools like our no tax on overtime calculator.
Our no tax on overtime calculator cuts through the legislative complexity. By entering a few key details into the no tax on overtime calculator, you can get a clear, reliable estimate of your potential tax savings.
Use our no tax on overtime calculator to see your personalized results:
Annual Overtime Earnings
Your estimated total annual overtime earnings.
Maximum Deduction
The maximum amount you can deduct under the new law's specific rules.
Tax Savings
Your potential savings on your 2025 federal income tax bill using the no tax on overtime calculator.
How Our No Tax on Overtime Calculator Works
Provide your regular hourly rate, average overtime hours per week, pay frequency (weekly, bi-weekly, etc.), and your federal tax filing status in our no tax on overtime calculator.
Just basic pay information needed
For an accurate calculation that includes the new income limitations, please enter your estimated Modified Adjusted Gross Income (MAGI) for the year into the no tax on overtime calculator.
Includes income phase-out calculations
Instantly see your personalized savings breakdown from the no tax on overtime calculator. We never store or share your data.
Your data never leaves your browser
Understanding Our No Tax on Overtime Calculator
Learn the key details behind the new overtime tax deduction
This deduction reduces your adjusted gross income, potentially lowering your tax bracket and increasing eligibility for other tax benefits.
Only the 50% premium portion of overtime pay qualifies for the deduction, not the full overtime amount.
Example:
Regular hourly rate: $20/hour
Overtime rate: $30/hour (1.5x regular rate)
The full $30/hour overtime pay is still earned, but only the $10/hour premium is eligible for the tax deduction.
Maximum deduction: $12,500 for single filers, $25,000 for married filing jointly.
Single Filers
Maximum Annual Deduction
Married Filing Jointly
Maximum Annual Deduction
Deduction phases out starting at $150,000 (single) or $300,000 (married filing jointly).
Phase-out Thresholds:
Reduction Rule:
For every $1,000 of income above the threshold, the deduction is reduced by $100.
This deduction is available for tax years 2025-2028 only, as specified in the legislation.
Frequently Asked Questions
Get answers to common questions about the No Tax on Overtime deduction, eligibility requirements, and how our calculator works.
What is the overtime tax deduction?
The overtime tax deduction allows eligible workers to deduct the premium portion (50% extra) of their overtime pay from their federal taxable income for tax years 2025-2028.
Who qualifies for this deduction?
Non-exempt employees who receive overtime pay under FLSA, have annual income under $160,000, and work more than 40 hours per week qualify for this deduction.
How much can I deduct?
You can deduct up to $12,500 (single) or $25,000 (married filing jointly) of the premium portion of your overtime pay, subject to income phase-out rules.
Does this apply to state taxes?
No, this is a federal tax deduction only. State tax rules vary and this deduction does not automatically apply to state income taxes.
What about FICA taxes?
This deduction only applies to federal income tax. You will still pay Social Security and Medicare (FICA) taxes on all overtime pay.
How do I claim this deduction?
This will be an above-the-line deduction on your federal tax return. Consult with a tax professional for specific filing guidance.
Is this deduction permanent?
No, this is a temporary provision that applies only to tax years 2025, 2026, 2027, and 2028 as specified in the One Big Beautiful Bill Act.
Can I use this calculator for previous years?
No, the overtime tax deduction only applies to tax years 2025-2028. It cannot be used for tax returns from previous years.
Ready to See Our No Tax on Overtime Calculator?
Don't guess how the new tax law will affect your paycheck. Use our free, detailed no tax on overtime calculator to get your personalized estimate now. Our no tax on overtime calculator provides instant, accurate results based on your specific situation.
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Detailed Breakdown
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