Overtime Premium Calculator
Find the overtime premium — just the "half" in time-and-a-half — from your regular hourly rate and overtime hours.
Reviewed by Saurabh Sharma and Ashay Saraswat · last verified August 30, 2026 against IRS guidance.
What "overtime premium" means
When people talk about overtime pay, they usually mean the full rate you're paid for overtime hours — often time-and-a-half, or 1.5x your regular rate. The "overtime premium" is a narrower, more specific term: it's just the extra amount on top of your regular rate, not the whole overtime rate.
Say your regular hourly rate is $22 and you're paid time-and-a-half, or $33/hr, for overtime. Your overtime premium is $11/hr — the "half" of time-and-a-half. Work 8 overtime hours at that rate and your total overtime premium for the week is $88, even though your total overtime pay for those hours was $264.
This distinction used to be mostly a payroll and wage-and-hour concept. It matters to a much wider audience now because the federal no-tax-on-overtime deduction, in effect for tax years 2025 through 2028, applies only to this premium amount, not to your full overtime paycheck. Seethe no tax on overtime calculatorto turn your premium into an estimated deduction and tax savings.
Frequently asked questions
What is overtime premium?
Overtime premium is the extra amount you're paid for overtime hours, above what you'd earn for the same hours at your regular rate. If your regular rate is $22/hr and you're paid time-and-a-half ($33/hr) for overtime, the overtime premium is $11/hr — the "half," not the full $33/hr.
Is overtime always time and a half?
Under the federal Fair Labor Standards Act (FLSA), non-exempt employees generally must be paid at least 1.5x their regular rate for hours worked past 40 in a week. Some states and some employer policies require more, such as double time for very long days, but time-and-a-half is the federal floor.
What is a weighted overtime rate?
A weighted (or blended) overtime rate applies when someone works at more than one pay rate in the same week, such as two different jobs for the same employer. The regular rate for overtime purposes is a weighted average of all the rates worked, not just the higher or lower one, and overtime is then calculated at 1.5x that blended rate.
Why does the overtime premium matter for my taxes?
Because it's the overtime premium specifically, not your full overtime paycheck, that counts as "qualified overtime compensation" for the federal no-tax-on-overtime deduction created for tax years 2025–2028. Use the calculator above to find your premium amount, then the no tax on overtime calculator to estimate the deduction and tax savings.