Overtime tax calculator
Overtime pay is taxed in your paycheck like any other pay. The deduction comes back at filing time. Here is the split.
Enter your numbers to see the deduction, each step, and the estimated tax saved.
Estimate only, not tax advice. Your return is decided by the IRS forms and instructions, and a tax professional can check your numbers.
Paycheck now, refund later
People often search for an overtime tax calculator because a paycheck with overtime looks smaller than expected. Part of that is real tax: federal withholding, Social Security and Medicare all apply to every dollar of overtime. The new deduction does not change those paycheck deductions. It reduces the income your federal tax is figured on when you file.
That is why the result above shows three things apart: tax taken from the overtime pay, payroll tax, and the estimated federal income tax the deduction may give back on your return. Withholding is an estimate here. Your actual paycheck follows your W-4 and your employer’s payroll system.
Sources
- IRS FS-2026-13: Questions and answers about the qualified overtime compensation deduction
- Schedule 1-A (Form 1040), 2025
- IRS Tax Withholding Estimator
- IRS Rev. Proc. 2025-32 (2026 tax brackets and standard deduction)
Last checked . Figures follow the IRS pages above; the law can change, so confirm on irs.gov before you file. This site gives estimates, not tax advice.
Questions
Why does tax still come out of my overtime pay?
Employers still withhold federal income tax on overtime. The IRS says an employer may not reduce withholding for the overtime deduction unless you give them an updated Form W-4 that accounts for it.
When do I get the benefit?
Usually when you file. The deduction lowers your taxable income on the return, so tax already withheld may come back as a larger refund or a smaller bill.
Can I change my withholding to see it in my paycheck?
Yes. The 2026 Form W-4 has a place for the expected overtime deduction in step 4(b), and the IRS Tax Withholding Estimator can include it.
Is the withholding figure on this page exact?
No. Employers use IRS withholding tables, which depend on your W-4 and pay period. The figure here multiplies the overtime by your tax bracket as a rough guide.
Does FICA come out of overtime?
Yes. Social Security and Medicare tax (7.65% for most employees) apply to the full overtime pay. The deduction does not touch them.