Overtime Pay Tax Calculator
Calculate federal withholding on overtime (time-and-a-half) for Head of Household
Overtime Pay Basics
FLSA Overtime Rate
1.5×
Time-and-a-half for hours over 40 per week
Tax Treatment
Same
No special tax rate - taxed as ordinary income
Key Point:
Overtime pay is NOT taxed at a higher rate. Many people think it is because withholding increases, but that's just because total income is higher. Your actual tax rate stays the same!
Overtime Pay Calculations
Example 1: $25/hour Worker
Work week: 50 hours (10 hours overtime)
• Regular pay: 40 hours × $25 = $1,000
• Overtime pay: 10 hours × ($25 × 1.5) = 10 × $37.50 = $375
Total gross: $1,375
Weekly Taxes:
• Federal income (assume 12% bracket): ~$165
• Social Security: $1,375 × 6.2% = $85
• Medicare: $1,375 × 1.45% = $20
Net take-home: ~$1,105 (80%)
Example 2: $35/hour Worker (Higher Income)
Work week: 55 hours (15 hours overtime)
• Regular pay: 40 hours × $35 = $1,400
• Overtime pay: 15 hours × $52.50 = $788
Total gross: $2,188
Weekly Taxes:
• Federal income (assume 22% bracket): ~$481
• Social Security: $2,188 × 6.2% = $136
• Medicare: $2,188 × 1.45% = $32
Net take-home: ~$1,539 (70%)
Notice: Higher bracket means more withholding, but overtime rate is still worth it!
Why Overtime "Feels" Higher Taxed
Many workers believe overtime is taxed at higher rate because their paycheck withholding increases. Here's why that happens:
Withholding Calculation Example
Worker earning $50k/year ($1,923 biweekly)
Normal Paycheck (80 hours):
• Gross: $1,923
• Withholding assumes annual income: $50,000
• HOH tax on $50k: ~$3,700/year = $142 per paycheck
Paycheck with Overtime (90 hours = 10 OT):
• Regular: $1,923
• Overtime: $288 (10 hrs × $19.23 × 1.5)
• Total: $2,211
• Withholding annualizes this: $2,211 × 26 = $57,486
• HOH tax on $57,486: ~$5,200/year = $200 per paycheck
Withholding jumps from $142 to $200 ($58 more)
But at tax time, you'll only owe based on actual annual income. If this was one-time OT, you'll get refund!
The Truth:
Overtime IS worth it! You take home 60-80% of that time-and-a-half pay. The "higher" withholding is just the payroll system being conservative. When you file taxes, it all evens out.
Annual Impact of Regular Overtime
| Base Salary | OT Hours/Week | OT Income | Total Income | Extra Tax | Net OT Gain |
|---|---|---|---|---|---|
| $50,000 | 5 | $9,375 | $59,375 | $1,875 | +$7,500 |
| $50,000 | 10 | $18,750 | $68,750 | $4,500 | +$14,250 |
| $75,000 | 5 | $14,063 | $89,063 | $3,094 | +$10,969 |
| $75,000 | 10 | $28,125 | $103,125 | $6,188 | +$21,937 |
Even after taxes, overtime significantly boosts take-home pay. 5-10 hours weekly can increase net income by $7,500-$22,000 per year!
FLSA Overtime Rules
Who Gets Overtime?
Non-exempt employees must receive overtime pay. Generally hourly workers and some salaried employees earning under $684/week ($35,568/year).
Who Doesn't Get Overtime?
- • Executive, administrative, professional employees (earning >$684/week)
- • Computer professionals (>$684/week or >$27.63/hour)
- • Outside sales employees
- • Some highly compensated employees (>$107,432/year)
Overtime Calculation Rules
- • Must be paid 1.5× regular rate for hours over 40 in workweek
- • Workweek = 7 consecutive 24-hour periods
- • No daily overtime required by federal law (some states have daily OT rules)
- • Holiday, weekend, night shift NOT automatically overtime (unless exceeds 40 hours)
💡 Overtime Tax Planning Tips
1. Adjust W-4 for Regular OT
If you work overtime every week, update W-4 Line 4(a) to reflect higher expected income. Prevents under-withholding.
2. Max 401(k) with Overtime Pay
Direct overtime earnings to 401(k). Reduces taxable income AND still builds savings. Can contribute up to $23,000/year.
3. One-Time OT = Refund Opportunity
If you rarely work OT, the higher withholding likely over-withholds. You'll get refund when you file.
4. Don't Refuse OT for "Tax Reasons"
Never refuse overtime because you think "taxes will eat it all." You always take home 60-80%. It's worth it!
5. Check Social Security Cap
Once you hit $176,100 in wages, overtime is exempt from 6.2% SS tax. Late-year OT gets 6.2% boost!