how do i correctly calculate overtime premium

victorinocasey · ‎April 15, 2026

DawnC · ‎April 15, 2026

The overtime premium—the extra you earn above your regular rate—is now tax-deductible for some taxpayers. For example, if you earn $20 per hour, your overtime rate is $30. The $10 difference is the overtime premium. With tax law changes for 2025–2028, you don't have to pay federal income tax on that extra $10.

You can deduct up to $12,500 per year ($25,000 if Married Filing Jointly).

More OT info

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