Overtime Net Pay Calculator

How Overtime Pay Works Under the Fair Labor Standards Act (FLSA), non-exempt employees must receive 1.5x their regular hourly rate for all hours over 40 in a workweek. This is commonly called “time and a half.”

If your regular rate is $22/hour: Overtime rate = $22 × 1.5 = $33/hour

Taxes on Overtime Overtime pay is taxed as ordinary income. There is no special overtime tax rate. However, because overtime pushes your total income higher, it may be taxed at a higher marginal rate.

Taxes deducted from overtime:

• Federal income tax (at your marginal rate)
• State income tax (varies by state, 0% in nine states)
• Social Security: 6.2%, up to an annual wage base that is indexed and rises each year ($184,500 for 2026)
• Medicare: 1.45% (no wage base limit)

Total FICA employee share: 7.65%

Example Regular rate: $22/hour Overtime rate: $33/hour Overtime hours: 10 hours × 4 weeks = 40 hours Gross OT: $33 × 40 = $1,320 Federal tax (22%): $290.40 State tax (5%): $66.00 FICA (7.65%): $100.98 Total tax: $457.38 Net OT pay: $1,320 - $457.38 = $862.62 Effective after-tax OT rate: $862.62 / 40 hours = $21.57/hour

When the multiplier is not 1.5

Federal law sets 1.5x as the floor, but several states go further and the calculator handles all three common rates.

• California requires 2x beyond 12 hours in a single day, and 2x for every hour past the eighth on a seventh consecutive working day. It also pays 1.5x after 8 hours in a day, which the federal weekly rule does not.
• Alaska, Nevada and Colorado have daily thresholds of their own, so you can earn overtime in a week that never reaches 40 hours.
• Union contracts frequently beat the statutory minimum. Double time on Sundays and holidays is common in construction and healthcare, and some agreements reach 2.5x.

Enter whichever rate your paperwork actually specifies. If a shift crosses two rates, run it twice and add the results.

Note on Withholding

This is where overtime gets its unfair reputation. Your paycheck withholding may be considerably higher than your real tax liability, because most payroll systems annualise the pay period: they take the cheque in front of them, assume every future cheque will be that size, and withhold at the bracket that implies. A single big overtime week therefore gets withheld as though you earned that much all year.

The money is not lost. It comes back at filing, or it lowers what you owe. But the paycheck can look as though overtime was taxed at 40% when your actual marginal rate is 22%, and that is the origin of the persistent belief that overtime is punished by the tax code. It is not. There is no separate overtime rate anywhere in the Internal Revenue Code.

The rate to enter here is your estimated marginal rate for the year as a whole, not whatever the payroll system withheld on one cheque.