Is the overtime deduction automatic on my paycheck?

No — it is claimed when you file your 2026 return on Schedule 1-A. You can adjust your W-4 withholding to see more in each paycheck during the year.

No Tax on Overtime Calculator (2026)

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No Tax on Overtime

2026 OT deduction • Savings

Filing status

Enter overtime as

Overtime premium for the year ⓘ

Overtime hours / year

Regular hourly rate

Modified AGI (total income)

Your federal tax bracket

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Enter your overtime to see your deduction

How the Overtime Deduction Works

Enter your overtime premium (or hours × regular rate, and we compute the premium).
Add your income and bracket.
See your deduction (capped at $12,500 / $25,000 joint) and the tax it saves.

No Tax on Overtime, Explained (2026)

The One Big Beautiful Bill lets workers deduct the overtime premium — the extra "half" of time-and-a-half pay — up to $12,500 per year ($25,000 married filing jointly). It's claimed on the new Schedule 1-A on top of your standard deduction. Only the premium counts: if your regular rate is $30 and overtime pays $45, the deductible part is the $15 premium per overtime hour.

The deduction phases out above $150,000 modified AGI ($300,000 joint), reduced by $100 per $1,000 over. Your savings equal the deductible premium times your tax bracket. This tool is an educational estimate, not tax advice.

No Tax on Overtime FAQ

What part of overtime is deductible? ▾

Only the premium — the amount paid above your regular rate (the "half" in time-and-a-half), up to $12,500 ($25,000 joint). Your base pay for those hours is not deductible.

Is this on my paycheck automatically? ▾

No — it's claimed when you file your 2026 return on Schedule 1-A. You can also adjust your W-4 withholding to see more in each paycheck.

Does it reduce Social Security/Medicare tax? ▾

No. It's a federal income-tax deduction only; FICA taxes still apply to overtime pay.