Overtime tax calculator
Overtime is not taxed at a special rate. It is supplemental wages, which changes how the employer withholds, not what you owe. This page shows the arithmetic both ways, so the number on your stub stops looking arbitrary.
Part of the supplemental pay guide - bonuses, overtime, severance and commissions are one category in Publication 15, withheld under one rule.
Overtime is in the same bucket as a bonus
Publication 15 lists the payments that are not regular wages, and overtime is on the list next to bonuses and commissions. The employer may withhold a flat 22% on it if it is identified separately, or add it to the regular paycheck and withhold on the total.
The distinction matters for cash flow, not for liability. An employee withheld at 22% whose marginal rate is 12% overpaid and gets it back; an employee at 32% owes the difference in April.
The pay arithmetic, before tax
Overtime is one and a half times the regular rate for hours past 40 in a workweek. The extra half is the premium; the rest is the same hourly wage you already earned. This is what that looks like at $25.00 an hour:
| Hourly rate | Hours | Regular pay | Overtime premium | Gross |
|---|---|---|---|---|
| $25.00 | 40 | $1,000.00 | $0.00 | $1,000.00 |
| $25.00 | 45 | $1,000.00 | $62.50 | $1,187.50 |
| $25.00 | 50 | $1,000.00 | $125.00 | $1,375.00 |
| $25.00 | 55 | $1,000.00 | $187.50 | $1,562.50 |
Computed at build time. Verified 2026-10-30.
What comes out of it
Applying the flat supplemental rate to an overtime payment, with FICA on top and no prior supplemental pay in the year:
| Extra pay | Federal (22%) | Social Security | Medicare | Net |
|---|---|---|---|---|
| $1,000.00 | $220.00 | $62.00 | $14.50 | $703.50 |
| $5,000.00 | $1,100.00 | $310.00 | $72.50 | $3,517.50 |
| $10,000.00 | $2,200.00 | $620.00 | $145.00 | $7,035.00 |
Computed at build time. Verified 2026-10-30.
Why the withholding rate looks higher than your rate
When the overtime is aggregated with a full paycheck, the combined amount is annualised for withholding purposes and taxed at the marginal band. That is why a heavy overtime week can withhold 30% while your effective rate for the year is 14%.
The aggregate method is not an error and not a penalty. It is the employer prepaying at the rate your last dollar is taxed at, and it reconciles on the return.
The state line
States differ: some publish a flat supplemental rate, some require aggregation, and a few have no wage withholding. Whatever the state does, FICA is unaffected - social security and Medicare apply to overtime under either federal method.
Frequently asked questions
- Is overtime taxed at a higher rate?
- No. Overtime is wages, and wages are taxed at your ordinary rate. What changes is withholding: an employer may treat overtime as supplemental wages and withhold a flat 22%, or fold it into the regular calculation. Either way the final tax is settled on your return.
- Why did my overtime check have so much taken out?
- Because it was aggregated with a normal paycheck. Adding the overtime to a full period of wages pushes the whole payment into your marginal band for withholding purposes, so the withholding rate looks higher than your average rate.
- Does Social Security come out of overtime?
- Yes, up to the annual wage base. Medicare comes out of all of it, plus the 0.9% additional Medicare tax above $200,000 of wages.
- Can my employer treat overtime as regular wages instead?
- Yes. Publication 15 lists overtime as supplemental wages but lets the employer treat it as regular wages. That changes withholding timing, not the tax owed.
- What is the overtime premium?
- The extra half-time above the regular rate for hours over 40 in a workweek. It is part of the overtime payment and is taxed the same way as the rest of it.
Related
- Bonus tax calculator - the same rule, applied to a bonus.
- Severance pay tax calculator
IRS Publication 15 (2026), section 7: supplemental wages, the 22% flat rate, 37% above $1,000,000, and the rule that FICA applies either way.
All figures verified on 2026-10-30.