Overtime

Overtime is pay for hours worked beyond a set limit. Under the federal Fair Labor Standards Act, nonexempt employees get at least 1.5 times their regular rate for hours over 40 in a workweek.

At $25 an hour, each overtime hour pays $37.50. Some states go further and require overtime after a set number of hours in a day. Salaried workers who meet the federal duties and salary tests are exempt and get no overtime. IRS rules list overtime among supplemental wages, though employers may withhold on it as regular pay.

Under the One Big Beautiful Bill Act, the extra half of time and a half is deductible on federal returns for tax years 2025 through 2028, within limits. Read whether overtime is taxed, the tips and overtime guide and the FAQ on whether tips are taxed, then add hours in the hourly paycheck calculator.