Overtime Tax Calculator
Find out exactly how much of your overtime pay you keep after federal tax, FICA, and state tax — using 2026 IRS brackets.
⏱️ Overtime Tax Calculator
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Based on 2026 federal brackets. FICA: 6.2% SS (wage base $176,100) + 1.45% Medicare. Estimate only.
How Is Overtime Pay Taxed?
Overtime pay is not taxed at a special punitive rate — it is taxed at your marginal income tax bracket, the same rate that applies to the last dollar of your regular pay. The confusion arises because overtime increases your total annual income, which can push more of your earnings into a higher bracket. But critically, only the income above a bracket threshold is taxed at the higher rate — not your entire paycheck.
For example: a single filer earning $55,000 in regular wages is in the 22% federal bracket. If overtime earns an additional $15,000, that $15,000 is also taxed at 22% (plus 7.65% FICA), giving a combined marginal rate of 29.65% before state tax. They keep roughly 70 cents of every overtime dollar earned.
Why Does My Overtime Check Look So Small?
Employers must withhold taxes from every paycheck. For supplemental wages like overtime, the IRS gives them two options: the flat rate method (22% federal withholding on overtime) or the aggregate method (withhold as if the combined amount were your regular rate). Either can look harsh on your pay stub — but withholding is just an advance payment. Your actual tax liability is settled at year-end when you file. Over-withholding comes back as a refund.
The Overtime Tax Formula
📐 Overtime Tax Formula
Federal Tax on OT = OT Taxable × Marginal Bracket Rate
FICA on OT = OT Gross × 7.65%
OT Net Take-Home = OT Gross − Federal − FICA − State
2026 Federal Income Tax Brackets (Single Filer)
| Taxable Income (Single) | Marginal Rate |
|---|---|
| $0 – $11,925 | 10% |
| $11,926 – $48,475 | 12% |
| $48,476 – $103,350 | 22% |
| $103,351 – $197,300 | 24% |
| $197,301 – $250,525 | 32% |
| $250,526 – $626,350 | 35% |
| Over $626,350 | 37% |
Standard deduction 2026: $15,000 (single), $30,000 (married filing jointly). MFJ bracket thresholds are approximately double single filer amounts.
How to Reduce Tax on Overtime Pay
- Increase 401(k) contributions. Traditional 401(k) contributions reduce taxable income dollar-for-dollar. In 2026, the limit is $23,500 ($31,000 if 50+). If overtime pushes you into the 24% bracket, an extra $5,000 contribution saves $1,200 in federal tax.
- Health Savings Account (HSA). If you have a high-deductible health plan, 2026 HSA limits are $4,300 (individual) or $8,550 (family) — all pre-tax.
- Flexible Spending Account (FSA). Healthcare and dependent care FSAs reduce taxable wages. Maximize before overtime season starts.
- Time large deductions. If you itemize, concentrate deductible expenses in years with high overtime income to maximize benefit.
Is Overtime Worth It Financially?
In almost every scenario, yes. Even in the 22% federal bracket with a 5% state rate, the combined marginal rate on overtime is roughly 35%. That means for every $100 of overtime gross, $65 is take-home — a positive return with zero investment risk. Where overtime becomes less attractive is for high earners crossing into the 32–35% bracket in high-tax states (California top rate: 13.3%), where combined rates can exceed 50%. In those cases, 401(k) deferrals become essential.