Overtime Calculator

Q: What is the OBBBA overtime tax deduction?

The OBBBA introduced a tax deduction for overtime pay, effective 2025-2028. Workers can deduct up to $12,500 (single) or $25,000 (MFJ) of overtime pay from taxable income. The deduction phases out at $150,000 (single) or $300,000 (MFJ) AGI.

Q: What are California's overtime rules?

California requires daily overtime in addition to weekly: more than 8 hours/day = 1.5x, more than 12 hours/day = 2x (double time). Working the 7th consecutive day triggers 1.5x for the first 8 hours, then 2x. These apply to most non-exempt employees.

Calculate your overtime pay, check exempt vs non-exempt status, and see your OT take-home after taxes. Includes the new OBBBA overtime tax deduction for 2025-2028.

Calculate your overtime pay, weekly/monthly/annual totals, and OBBBA tax savings

Regular hourly rate

Your base pay per hour before OT

Regular hours/week

Overtime hours/week

Hours above your regular schedule

OT multiplier

1.5x = time and a half, 2.0x = double time (CA)

State

CA has daily OT rules in addition to weekly

Weeks per year

Filing status (for OBBBA)

Affects OBBBA OT deduction limit

Total annual income (approx)

For OBBBA phase-out calculation

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How to Use This Calculator

OT Pay tab

Enter your regular hourly rate, regular hours/week, and overtime hours/week. Choose your OT multiplier (1.5x standard or 2.0x for California double time). The calculator shows weekly, monthly, and annual totals plus your estimated tax savings from the OBBBA overtime deduction.

Exempt vs Non-Exempt tab

Enter your annual salary and typical hours worked per week. The calculator checks the FLSA salary threshold ($35,568 in 2026) and shows whether you're exempt or non-exempt. If non-exempt, it calculates how much overtime your employer owes you. If exempt, it shows your effective hourly rate at various hour levels.

OT Take-Home tab

See how much of your overtime pay you actually keep after federal tax, state tax, and FICA. The calculator shows your net OT both with and without the OBBBA overtime deduction so you can see the real impact of working extra hours.

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The Formula

Federal overtime pay is straightforward:

OT Pay = Regular Hourly Rate × OT Multiplier × OT Hours

Weekly Total = (Rate × Regular Hours) + (Rate × Multiplier × OT Hours)
Annual Total = Weekly Total × Weeks Worked

OBBBA OT Deduction (2025-2028):
Deductible OT = min(Annual OT Pay, $12,500 single / $25,000 MFJ)
Tax Savings = Deductible OT × Marginal Tax Rate

The OBBBA overtime deduction is new for 2025-2028. It lets workers deduct up to $12,500 ($25,000 married filing jointly) of overtime pay from taxable income, effectively reducing the tax bite on OT earnings. The deduction phases out at $150,000 AGI (single) or $300,000 (MFJ).

Example

Marcus — Warehouse Supervisor, Los Angeles CA

Marcus earns $25/hr as a warehouse supervisor. He works 50 hours per week (40 regular + 10 overtime at 1.5x). He files as single with total AGI around $71,500.

OT Pay tab

Regular pay (40 hrs × $25)$1,000/week

OT pay (10 hrs × $25 × 1.5x)$375/week

Total weekly$1,375/week

Annual total$71,500

Annual OT pay$19,500

OBBBA deduction (capped)$12,500

Estimated tax savings$1,500

Marcus earns $1,375/week total. His $19,500 in annual OT qualifies for the $12,500 OBBBA deduction, saving him roughly $1,500 in federal taxes (at the 12% marginal rate).

OT Take-Home tab

Gross OT (weekly)$375

Federal tax on OT-$45

CA state tax (9.3%)-$35

FICA (7.65%)-$29

Net OT (without OBBBA)$266/week

OBBBA tax savings+$29/week

Net OT (with OBBBA)$295/week

Marcus takes home about $295/week from his 10 hours of overtime after all taxes, thanks to the OBBBA deduction. Without the deduction, he'd keep $266/week.

FAQ

What is overtime pay and when does it apply? ▼

Under the Fair Labor Standards Act (FLSA), non-exempt employees must be paid at least 1.5 times their regular hourly rate for all hours worked over 40 in a workweek. This is federal law and applies to most hourly workers. Some states like California have additional daily overtime rules: over 8 hours in a day triggers 1.5x, and over 12 hours triggers 2x (double time).

What is the difference between exempt and non-exempt? ▼

Exempt employees are not entitled to overtime pay. To be exempt, you must meet BOTH a salary test (currently $35,568/year or $684/week) AND a duties test (executive, administrative, professional, computer, or outside sales). If you fail either test, you are non-exempt and must be paid overtime. The DOL attempted to raise the salary threshold to $58,656 in 2024, but federal courts blocked the rule.

What is the OBBBA overtime tax deduction? ▼

The One Big Beautiful Bill Act (OBBBA) introduced a new above-the-line deduction for overtime pay, effective 2025 through 2028. Workers can deduct up to $12,500 (single) or $25,000 (married filing jointly) of overtime pay from their taxable income. The deduction phases out for AGI above $150,000 (single) or $300,000 (MFJ). This means your OT earnings are partially tax-free during these years.

What are California’s overtime rules? ▼

California has stricter overtime rules than federal law. In addition to weekly overtime (>40 hours), California requires daily overtime: more than 8 hours in a single day triggers 1.5x pay, and more than 12 hours triggers 2x (double time). Working on the 7th consecutive day in a workweek also triggers overtime: the first 8 hours at 1.5x, then 2x after that. These rules apply to most non-exempt employees in California.

How do I calculate my overtime pay? ▼

Multiply your regular hourly rate by the overtime multiplier (usually 1.5x) and then by the number of overtime hours. For example: $25/hr × 1.5 × 10 hours = $375 in weekly OT pay. For annual totals, multiply by the number of weeks you work OT. Remember that your take-home will be less after federal tax, state tax, and FICA — use the OT Take-Home tab to see exact amounts.

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