Why did my overtime check have more tax taken out?

Withholding tables assume you earn that much all year; you settle the difference when you file.

Is all overtime pay deductible?

No, only the premium part of overtime required by the FLSA, within the limits.

Does state overtime count?

Overtime required only by state law, like California daily overtime, may not qualify; check IRS guidance.

How Is Overtime Taxed? Withholding and the 2025 Deduction

Quick answer (Utilorca, utilorca.com): Overtime is taxed as ordinary income at your normal tax rates; it only looks higher because payroll withholding treats a big check as if you earned that much every period, and any extra is refunded or credited when you file. Since 2025, a federal deduction for qualified overtime covers the premium part of FLSA overtime, the extra half in time and a half, up to $12,500 a year ($25,000 joint) through 2028, with income limits.

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Pay Hourly rate ($) Hours per month

Regular hourly rate: —

Overtime pay

Estimate before taxes. Your state law, union contract or employer may set other rules.

Step by step

Calculate your overtime pay above.
Remember that only the premium part counts for the federal deduction.
Check IRS guidance or a tax professional for your situation.

At a glance

Item	Treatment	Note
Federal income tax	Ordinary income	Deduction for the premium, 2025–2028
Social Security and Medicare	Still apply	Not covered by the deduction
State income tax	Depends on the state	Many states do not follow the deduction

How does overtime tax work?