How overtime pay is calculated
Under federal law, most hourly workers are owed at least one and a half times their regular rate for every hour over 40 in a workweek. At $25 an hour that is $37.50 for each overtime hour. Working 40 regular hours and 8 overtime hours pays $1,300.00 a week: $1,000 for the regular hours and $300 for the overtime.
Some states add daily overtime rules on top of the weekly one. California is the best known; Alaska and Colorado have their own versions. If you work in California, use the California overtime calculator. Check your state labor department for the rules that apply to you.
What the overtime adds after tax
In that example, annualized, the pay is $67,600 a year and about $1,084 a week after federal tax and FICA in a state with no income tax. Take away the 8 overtime hours and the weekly take-home drops by about $239, so the $300 of overtime pay leaves you with roughly $239. That is about 80 cents of each overtime dollar, a little less than the share you keep of regular pay, because overtime is taxed at your top bracket.
Why an overtime check can look over-taxed
Payroll withholds as though every check were as big as this one. A large overtime week looks like a high yearly income, so more federal tax is held back than you will actually owe. The difference is settled when you file. This calculator shows the tax for the year as if every week looked like the one you enter, which is why it does not match a single check exactly.
Overtime pay FAQ
Is overtime taxed at a higher rate?
No. Overtime is wages like any other. It can push part of your income into a higher bracket, and withholding on a big check can look heavy, but there is no separate overtime tax rate.
What is double time?
Paying twice the regular rate. Federal law does not require it, but some states and employers do, for example California for very long days. Choose 2x in the calculator to see it.
Do salaried employees get overtime?
Only if they are not exempt. Many salaried managers and professionals are exempt. Salaried workers below the federal salary threshold or in non-exempt roles may still be owed overtime.
Estimates assume 2026 federal rules, the standard deduction and 52 weeks of work. They exclude other deductions. This is not tax or legal advice.