No Tax on Overtime Calculator
See exactly how much more you take home if overtime pay becomes tax-exempt under proposed federal policy. Enter your hourly wage, regular hours, and overtime hours to compare your current after-tax paycheck against what you would keep with no federal income tax on overtime — with weekly, monthly, and annual savings projections.
Choose a calculation mode
Hourly worker — enter your wage and hours worked. Salaried worker — enter your salary and overtime hours directly.
How the calculator works
Estimates federal income tax on overtime pay using your marginal bracket, then shows the difference if that federal tax were zero. State tax is modelled separately — most state exemptions have not been proposed.
What counts as overtime?
Under FLSA, overtime is hours worked beyond 40 per week, paid at 1.5× the regular rate minimum. The proposed federal exemption targets this overtime premium — regular wages would still be taxed normally.
What is "no tax on overtime"?
"No tax on overtime" refers to a proposed federal policy that would exempt overtime pay from federal income tax. Under current law, all wages including overtime are taxed as ordinary income at your marginal federal bracket. The proposal would allow workers who earn overtime to keep the full pre-tax amount of those extra hours — or at minimum exclude overtime from federal income tax withholding.
The policy gained significant attention during the 2024 presidential campaign and has been discussed in Congress. As of early 2026, it has not been signed into law, but various bills have been introduced. This calculator lets you project how much you would save if the policy passes.
2024 federal income tax brackets (single filer)
Most overtime workers fall in the 22% or 24% bracket. At 22%, every $100 in overtime pay costs $22 in federal income tax — the amount the proposed exemption would let you keep.
Frequently asked questions
Is no tax on overtime law yet?
As of March 2026, no. "No tax on overtime" is a proposed federal policy that has been discussed and introduced in Congress but has not been signed into law. This calculator shows what your savings would be if the exemption passes.
Would FICA taxes still apply to overtime?
Most current proposals focus on exempting overtime from federal income tax only. FICA taxes (Social Security at 6.2% and Medicare at 1.45%) would likely still apply to overtime earnings. This calculator separates federal income tax from FICA so you can see each component clearly.
What about state income taxes on overtime?
A federal exemption would not automatically apply to state income taxes. Each state would need to pass its own legislation. This calculator lets you input your state tax rate separately so you can model different scenarios.
Who benefits most from no tax on overtime?
Workers who regularly work significant overtime hours and fall in the 22%–24% federal bracket benefit most in dollar terms. Industries with high overtime hours — manufacturing, healthcare, transportation, construction, and retail — would see the largest aggregate impact.
How is overtime pay calculated?
Under the Fair Labor Standards Act (FLSA), overtime is paid at a minimum of 1.5× the regular hourly rate for all hours worked beyond 40 in a workweek. Some employers pay double time (2×) for certain hours or holidays. The proposed tax exemption applies to the overtime pay itself, not just the premium.
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Disclaimer
This calculator is for educational and planning purposes only. It does not constitute tax, legal, or financial advice. Tax brackets and rates are based on 2024 federal figures and are subject to change. The "no tax on overtime" policy modelled here has not been enacted into law as of March 2026. Always consult a qualified tax professional for advice specific to your circumstances.