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Cost of Working Overtime Calculator

Estimate cost of working overtime in seconds with a simple, mobile-friendly calculator.

True overtime value

Ready to calculateEnter your values, then tap Calculate.

Enter your values and tap Calculate to see the result.

What this means

This calculator gives a quick estimate for cost of working overtime using the numbers you enter. The main result is meant to help you understand the size of the number and compare a few practical scenarios without building a full spreadsheet. It is most useful as a first-pass planning tool: change one input, watch the result move, and use the related calculators below to check nearby questions. This calculator uses a simple planning formula. Real-world fees, taxes, timing, or provider rules may still change the final number. Before making a high-stakes decision, confirm the details that matter most, such as local prices, taxes, benefits, loan terms, legal rules, insurance plan details, or live market data.

After-Tax Overtime Value and the IRC Section 225 Deduction

Last updated July 2, 2026

Overtime pays more per hour, but the marginal tax rate on those extra dollars is higher than on your regular wages. At $20 per hour, time-and-a-half overtime pays $30 per overtime hour. For a worker in the 22 percent federal bracket, the federal income tax on that $30 is $6.60. FICA takes another $2.30. Combined federal withholding is $8.90, leaving approximately $21.10 per overtime hour before state tax. The financial premium over regular after-tax pay still exists, but the gross premium narrows considerably after withholding.

The One Big Beautiful Bill Act changed this calculus for FLSA-eligible hourly workers. Under IRC Section 225, the premium portion of FLSA-required overtime is deductible from federal taxable income for tax years 2025 through 2028, capped at $12,500 per year for single filers. A worker in the 22 percent bracket with $6,000 in qualifying overtime premium deduction saves approximately $1,320 in federal income tax. FICA taxes still apply to all overtime wages regardless of the deduction.

The calculation shows your after-tax overtime value by accounting for both the higher marginal tax rate and the new IRC Section 225 deduction if you qualify. For FLSA-eligible hourly workers through 2028, the deduction meaningfully improves the real financial return on every overtime hour worked.

Sources

How this is estimated

Assumptions used

Calculator reviewed 2026-06-19

Short FAQ

What does this cost of working overtime show?

It gives a quick estimate using the numbers you enter, so you can understand the rough size of the answer. The result is meant to be useful in seconds, not to replace a full quote, official calculation, professional review, or detailed financial plan.

Is this exact?

No. It is a planning estimate. Real results can change because of taxes, fees, local prices, timing, provider rules, eligibility, and personal details. Use the calculator to get oriented, then confirm important numbers with statements, quotes, official sources, or a qualified professional.

What assumptions should I check?

Check the inputs you can control first: rates, prices, balances, miles, hours, dates, and local costs. This calculator uses a simple planning formula. Real-world fees, taxes, timing, or provider rules may still change the final number.

What should I check next?

If the result affects a real decision, compare it with your actual documents, bills, plan details, employer rules, or local quotes. Use related calculators on this page to test nearby scenarios before moving into a deeper SumPilot tool.

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