Paychecks & payroll
An hourly paycheck calculator that counts the overtime properly
An hourly paycheck calculator with overtime: clients enter wage, regular and overtime hours and see net pay per check after 2026 federal tax and FICA, with the overtime deduction applied where they choose.
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How is take-home pay calculated for hourly workers with overtime?
Multiply regular hours by the wage and overtime hours by 1.5 times the wage, then multiply weekly pay by weeks worked. Subtract pre-tax deductions and estimated federal income tax, then Social Security and Medicare. For 2025 to 2028, part of overtime pay may be deductible: up to $12,500 ($25,000 married filing jointly), phased out above $150,000 / $300,0002026 · 2025 tax law.
March, when the overtime deduction comes up at filing
Hourly workers heard about 'no tax on overtime' and want to know what it means for them. The answer is narrower than the headline: it is a deduction for the premium half of qualifying overtime, with a cap and an income phase-out, and payroll taxes still apply. Clients in trades, healthcare and logistics search this during filing season and again when overtime picks up.
What the client types into a search box
“how much of my overtime is tax free now”
How a client works through it
Enter wage and hours
Hourly wage, regular hours per week, overtime hours per week and weeks worked per year.
Choose pay frequency and filing status
These set the per-check figures and the federal brackets.
Decide on the overtime deduction
A switch applies the deduction for the premium half of overtime, within the cap and phase-out.
Read net pay and send it
Net per paycheck, annual gross and net, federal tax and FICA appear together and can be sent to your firm.
What lands in your inbox
When a client asks your firm to review the result, the request arrives as a contact record with their inputs and results attached, by email and, on paid plans, by webhook to your CRM.
Received
Wage, regular and overtime hours and weeks worked show annual earnings and how much overtime is involved. A client who ticks the overtime deduction with heavy overtime hours is likely to need help documenting it. Low annual pay combined with children may also suggest Earned Income Credit eligibility worth checking.
What does the overtime deduction change in the result?
Turning the deduction on lowers Federal Income Tax, because part of overtime pay is deducted before tax is figured. It does not change FICA (SS + Medicare): Social Security and Medicare are still due on all wages, overtime included. Comparing the result with the switch on and off shows the client what the deduction is worth to them.
Annual Gross Pay and Gross per Paycheck include overtime at 1.5 times the wage. Net Pay per Paycheck is the estimate of what reaches the bank account before state and local taxes.
Results shown: Net Pay per Paycheck · Annual Gross Pay · Annual Net Pay · Federal Income Tax · FICA (SS + Medicare) · Gross per Paycheck.
The premium half, in numbers
A worker earning $30 an hour works 5 overtime hours a week for 50 weeks. Overtime pays $45 an hour, of which $15 is the premium half. The premium totals $15 × 5 × 50 = $3,750 for the year, which is the amount the deduction can cover, subject to the cap and phase-out. The straight-time $30 part of each overtime hour stays taxable.
Why should a tax firm offer an hourly paycheck calculator?
Hourly and overtime-heavy households are a large part of a tax preparer's market, and they are underserved by salary-only calculators. A calculator that handles overtime and the 2025 deduction answers the question they actually have, and demonstrates that your firm understands their situation.
The deduction also creates documentation questions: is the overtime qualified, and will the employer report it? That is preparer territory, and the calculator brings it to you.
Follow-ups this request opens
- Confirm whether the client's overtime qualifies for the deduction
- Check Earned Income Credit eligibility for lower-income households
- Review W-4 withholding for irregular overtime pay
- Prepare the return with the overtime deduction documented
What this calculator leaves out
- Overtime is assumed to be paid at 1.5 times the wage; double time is not modeled.
- The overtime deduction assumes the overtime qualifies; eligibility rules are not checked.
- No state or local taxes, tips, credits or other withholdings.
- Hours are assumed steady across the year.
Platform disclaimer shown under the calculator: Estimates only. Uses 2026 federal brackets and standard deductions, Social Security (6.2% up to the $184,500 wage base) and Medicare (1.45% plus 0.9% above $200,000). Excludes state/local tax, credits and other withholdings. Overtime assumed at 1.5x. Not tax advice.
Compliance note for firms
The overtime deduction is new and its qualification rules matter. An estimate is not a determination that a client's overtime qualifies. If your firm replies to a request with a view on eligibility, that is written advice under Circular 230 §10.37 and should rest on the client's actual pay records, not on the calculator inputs alone.
Not legal advice. See our disclaimer and the guide to compliance for client calculators.
2026 figures this page relies on
| Figure | Value | Tax year | Source |
|---|---|---|---|
| Deduction for qualified overtime premium pay (2025–2028) | up to $12,500 ($25,000 married filing jointly), phased out above $150,000 / $300,000 | 2026 | 2025 tax law, as stated in the calculator |
| Employee FICA: Social Security / Medicare | 6.2% Social Security + 1.45% Medicare (7.65%) | 2026 | SSA and IRS |
| Social Security wage base (taxable maximum) | $184,500 | 2026 | SSA |
| Additional Medicare Tax and withholding threshold | 0.9% on wages over $200,000 | 2026 | IRS |
The same values drive the calculator. Full list on the 2026 figures page.
Terms your client sees in the calculator
These definitions appear in the calculator's collapsible Definitions block, so clients don't have to call to ask what a label means.
- Net pay
- Take-home pay: gross pay minus federal income tax, Social Security, Medicare and pre-tax deductions. This calculator shows it per paycheck and per year. State and local taxes, post-tax deductions and benefit premiums are not modeled, so an actual paycheck will usually be somewhat lower.
- Gross pay
- Total earnings before any taxes or deductions. Here it is the hourly wage times regular hours, plus overtime hours at 1.5 times the wage, times weeks worked per year. Dividing annual gross pay by the number of pay periods gives the gross amount per paycheck.
- Overtime pay
- Pay for hours worked beyond the regular schedule, which this calculator figures at 1.5 times the hourly wage, the usual rate required under the Fair Labor Standards Act for non-exempt employees who work past the federal weekly threshold. Some states and employers have additional overtime rules not reflected here.
- FICA
- The payroll taxes withheld for Social Security and Medicare. As used in this calculator: Social Security at 6.2% of wages up to $184,500 for 2026 (SSA, 2026), and Medicare at 1.45% of all wages. FICA is figured on gross pay, so a traditional 401(k) contribution does not reduce it.
- Additional Medicare Tax
- An extra 0.9% Medicare tax on wages above $200,000, as stated in this calculator’s assumptions. Employers begin withholding it once an employee’s wages pass that amount in the year. It is on top of the regular 1.45% Medicare tax and has no employer match.
- Federal income tax withholding
- The federal income tax your employer holds back from each paycheck and sends to the IRS as a prepayment of your annual tax. This calculator estimates it from annual taxable pay using 2026 federal brackets and the standard deduction for your filing status. Your actual liability is settled when you file your return.
In our glossary: FICA · Additional Medicare Tax
Hourly Paycheck calculator: questions from firms and clients
Is overtime pay tax free now?
Not entirely. For 2025 through 2028, a deduction applies to the premium portion of qualifying overtime: up to $12,500 ($25,000 married filing jointly), phased out above $150,000 / $300,0002026 · 2025 tax law. Social Security and Medicare still apply to all overtime pay.
Does the calculator assume time-and-a-half?
Yes, overtime is valued at 1.5 times the hourly wage. Double time or other premium rates are not modeled.
Does the deduction reduce payroll taxes?
No. It is an income tax deduction. FICA is still 6.2% Social Security + 1.45% Medicare (7.65%)2026 · SSA and IRS on all wages.
Can clients see the difference the deduction makes?
Yes. They can switch it on and off and compare Federal Income Tax and Net Pay per Paycheck.
What if hours vary a lot during the year?
Clients should enter average weekly hours. For very irregular schedules, the annual figures are more reliable than the per-check ones.
Does it include tips?
No. Tipped workers should talk to your firm, since tip income has its own reporting and deduction rules.
Is this calculator useful for employers?
It helps employees understand their pay, but it is not a payroll system and should not be used to run payroll.
Which plan includes it?
Network, with the other tax calculators. See pricing.
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