Decimaly · Tax
IRC §225 · Tax years 2025–2028No Tax on Overtime Calculator
Estimate your federal deduction and tax savings from the OBBBA overtime premium deduction — only the “half” in time-and-a-half qualifies.
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The math
OT premium pay (the “half”)
Statutory cap for your filing status$12,500
Phase-out reduction (MAGI-based)$0
Your allowed deduction$2,700.00
Estimated federal tax savings
$324
Educational estimate only, not tax advice. Only FLSA-required overtime premium for non-exempt W-2 employees qualifies — regular straight-time pay, salaried-exempt overtime, and 1099/self-employed income do not. Deduction phases out $100 per $1,000 of MAGI above $150,000 (single) / $300,000 (joint), reaching $0 at $275,000 / $550,000. Social Security and Medicare taxes still apply to all overtime pay regardless of this deduction. Consult a tax professional for your specific return.