No Tax on Overtime Calculator
Estimate how much federal income tax you save under the 2025–2028 qualified overtime deduction.
Simplified estimate: assumes the MAGI shown is your wage income, standard deduction, single or joint filing. Source: IRS – One Big Beautiful Bill provisions.
Example savings
| Rate | OT hours | MAGI | Deduction | Tax saved (single) |
|---|---|---|---|---|
| $20 | 100 | $45,000 | $1,000 | $120 |
| $25 | 200 | $60,000 | $2,500 | $300 |
| $30 | 300 | $75,000 | $4,500 | $990 |
| $40 | 400 | $120,000 | $8,000 | $1,760 |
| $50 | 600 | $160,000 | $11,500 | $2,760 |
Frequently asked questions
What is the no tax on overtime deduction?
The One Big Beautiful Bill Act lets eligible workers deduct qualified overtime compensation (the premium “half” of time and a half required by the FLSA) from federal taxable income for 2025 through 2028. Up to $12,500 ($25,000 married filing jointly).
Is overtime free of Social Security and Medicare?
No. FICA taxes and most state income taxes still apply. It is a deduction for federal income tax only.
Who qualifies?
Workers receiving FLSA-required overtime with a valid SSN. The deduction phases out by $100 for every $1,000 of modified AGI over $150,000 ($300,000 joint). Married filing separately is not eligible.
Last updated October 10, 2026. How we calculate · Disclaimer