Overtime Pay Calculator With Taxes 2026

How this is calculated

Your employer does not settle your tax bill once a year. It withholds from every paycheck using the percentage method the IRS publishes in Publication 15-T, and this calculator runs the same steps in the same order.

Gross pay for the period is worked out first. Pre-tax deductions come off next, and this is where most free calculators go wrong: a traditional 401(k) contribution reduces the wages your income tax is figured on, but it does not reduce the wages Social Security and Medicare are figured on. A health premium, HSA or FSA contribution reduces both, because those sit inside a Section 125 cafeteria plan.

What remains is annualised, reduced by the standard deduction for your filing status, and run through the federal bracket table. Dependent credits are subtracted, then the result is divided back down to your pay period and any extra W-4 withholding is added. State tax is calculated separately on its own base with its own deduction and brackets. Post-tax items such as Roth 401(k) and garnishments come off last, and what is left is your net pay.

The federal overtime rule

Under the Fair Labor Standards Act, a non-exempt employee must be paid at least 1.5 times their regular rate for every hour worked beyond 40 in a workweek. The workweek is a fixed period of seven consecutive days chosen by the employer, and hours cannot be averaged across two weeks to avoid the premium.

The regular rate is not always your base rate. It includes non-discretionary bonuses, shift differentials and commission earned in that week, divided by the hours worked. If you earn a production bonus, your true overtime rate is higher than 1.5 times your base hourly figure.

Daily overtime and double time

Several states go beyond the federal rule. California pays overtime after 8 hours in a day, double time after 12 hours in a day, and double time after the eighth hour on a seventh consecutive workday. Alaska, Nevada, Puerto Rico and Colorado have their own daily rules.

This calculator applies the 1.5 multiplier to the overtime hours you enter. For a California day that ran past 12 hours, split the hours: enter the time-and-a-half hours here and add the double-time hours as a separate run at twice the rate.

Why overtime looks over-taxed

Overtime is ordinary income and carries no special rate. What makes a big week look punished is annualisation: payroll multiplies that period by the number of periods in the year and withholds as though the overtime repeats every week. That can push one check into a higher bracket than your actual annual income occupies.

The over-withheld amount is not lost. It shows up as a larger refund, or a smaller balance due, when you file. If it happens every month, reduce the extra withholding on your W-4 rather than declining the hours.