2025 Overtime Pay Deduction Calculator

Find out how much of your overtime pay is deductible under the new 2025 tax laws.

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Total Overtime Pay Received This Year ?

Your Deductible Overtime Amount for 2025 is:

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Enter your information above to see your potential deduction.

Understanding the New Overtime Pay Deduction

Another major benefit from the "One Big Beautiful Bill Act" is a new tax deduction for hourly workers who earn overtime.

What is the overtime deduction?

For 2025, you can deduct the "half" portion of your "time-and-a-half" overtime pay. For example, if your regular rate is $20/hour, your overtime rate is $30/hour. The extra $10 is the "half" portion. This new law lets you deduct the total of that extra pay from your taxable income.

What are the limits on the deduction?

The total amount you can deduct is capped each year. The limits are:

$12,500 per year for Single and Head of Household filers.
$25,000 per year for those who are Married Filing Jointly.

How do the income limits work?

This deduction is designed for low- and middle-income earners and is not available to high earners.

For Single / Head of Household Filers: The deduction is available if your total income is under $150,000.
For Married Filing Jointly: The deduction is available if your total income is under $300,000.

If your income is above these thresholds, you cannot claim the deduction. Our calculator handles this check for you automatically.