Overtime Tax Calculator 2025 — Your Real Overtime Rate
Calculate the actual tax rate on your overtime pay. Debunk the overtime tax myth — see exactly what you keep from each overtime hour.
Overtime Pay Breakdown
How Overtime Is Actually Taxed
Overtime pay is taxed as ordinary income — it is simply added to your regular wages. The government applies your normal marginal rate to your overtime earnings, meaning only the portion that falls in each bracket is taxed at that bracket's rate.
The "overtime tax myth" comes from the fact that paycheck withholding can look high because your employer annualizes your income for that period. But at year-end, if too much was withheld, you get a refund.
The Formula
Marginal Rate on OT = Federal Marginal Rate + State Rate + FICA Rate (7.65%)
OT Net Per Hour = OT Gross × (1 − Marginal Rate)
OT Always Positive: You always keep at least (1 − top marginal rate) of OT pay
Example
OT gross rate: $25 × 1.5 = $37.50/hour
Regular income: 40 × $25 × 52 = $52,000/year → 22% marginal bracket
OT income: 10 × $37.50 × 52 = $19,500 (also in 22% bracket)
OT marginal rate: 22% fed + 5% state + 7.65% FICA = 34.65%
OT take-home: $37.50 × (1 − 34.65%) = $24.51/hour net
Still 65 cents per OT dollar — always worth it!
Overtime Tax Myth Debunker
Visual proof that overtime is never taxed at 100%+ and always worth taking
Visual proof: overtime is never 100% taxed. Every overtime dollar puts money in your pocket.
| Hourly Rate | OT Gross/hr | Tax on OT/hr | OT Net/hr | You Keep |
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Annual value of working different amounts of overtime at your current rate.
| Weekly OT Hours | Annual OT Gross | Annual OT Net | Monthly OT Cash |
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