Estimate your federal tax savings under the One Big Beautiful Bill Act
Under the 2026 One Big Beautiful Bill Act eligible hourly workers can deduct overtime premium pay from federal taxable income — up to $12,500 per year for single filers and $25,000 for joint filers. On $15,000 in overtime earnings at a 22% tax bracket this saves approximately $2,750 in federal taxes. FICA taxes still apply. Valid for tax years 2025–2028 only.
The One Big Beautiful Bill Act signed July 4 2025 created a new above-the-line federal income tax deduction for overtime premium pay. This only covers the premium portion of overtime — the extra 0.5x above your regular rate. Regular wages and FICA taxes are unaffected. This calculator estimates your federal tax savings for tax years 2025 through 2028.