No Tax on Overtime Calculator (2025–2028)

The OBBBA "no tax on overtime" provision excludes up to $12,500 (single/HoH/MFS) or $25,000 (MFJ/QW) of FLSA overtime premium from federal income tax for tax years 2025 through 2028. FICA still applies.

Guidance, not advice. This calculator runs the rules as published, it doesn't assess your circumstances. Your actual tax may be affected by factors it doesn't cover (deductions, credits, filing status nuances, state-specific adjustments). Always seek financial or tax advice from a qualified CPA, Enrolled Agent, or tax attorney, or contact the IRS. Read our editorial scope →

Temporary provision — expires after tax year 2028

Temporary provision — expires after tax year 2028. Without further legislation, this benefit is not available for 2029 and beyond.

Your situation

Cap is $12,500 (single/HoH/MFS) or $25,000 (MFJ/QW) of FLSA-overtime premium (the half-time portion only, not the straight-time hours).

Filing status

FLSA overtime premium (the "half" of time-and-a-half)

Example: 100 OT hours × $30/hr base × 0.5 premium = $1,500 premium.

Other taxable income (for marginal-rate estimate)

Your estimated savings

Cap for SINGLE

$12,500

Excludable

$8,000

Federal tax savings (22% bracket)

$1,760

FICA still applies

Overtime premium remains subject to Social Security and Medicare tax. The 7.65% employee FICA on $8,000 is approximately $612, unchanged.

Only the premium portion (the extra 0.5× over base) qualifies — not the full time-and-a-half hours. State-overtime premiums (e.g. California daily OT) do not qualify unless they are also FLSA overtime.

Tax year 2026 · USD · OBBBA permanent law

Formula: Federal savings ≈ min(OT premium, cap) × marginal federal rate

Assumptions

Cap of $12,500 single / $25,000 MFJ of FLSA overtime premium excluded from federal income tax (§225).
Only the premium half qualifies — straight-time wages remain fully taxable.
Provision sunsets after the 2028 tax year.
OT remains subject to FICA, federal unemployment tax, and most state income taxes.

Estimates only — not tax advice. Brackets, deductions and thresholds reflect the locked 2026 federal configuration. State amounts use each state's posted 2026 top-line rules and may differ from a full state-form computation. Always confirm complex situations with a qualified CPA, EA, or tax attorney.