Paycheck Guide · Overtime · 2026
How Overtime Pay Is Taxed: Complete Guide (2026)
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Overtime pay is wage income. It is not a separate category with a permanently higher income-tax rate. A larger check can look more heavily taxed because payroll withholding annualizes the check or applies a supplemental-wage method.
The Higher-Bracket Misconception
Tax brackets are marginal. Additional earnings do not cause every dollar you earn to be taxed at a higher rate. If overtime significantly increases annual income, only the dollars in a higher bracket are affected.
Texas Regular-Pay vs. Overtime Example
This engine-derived example compares a single filer in Texas paid biweekly with a standard W-4 and no pre-tax deductions. The overtime scenario adds $5,000 in annual wages.
| Scenario | Annual gross | Annual federal withholding | Annual take-home |
|---|---|---|---|
| Regular wages | $52,000 | $4,060 | $43,962 |
| Regular wages plus overtime | $57,000 | $4,660 | $47,980 |
FICA and State Withholding Still Apply
Overtime wages are generally subject to Social Security and Medicare withholding. From the calculator's official-source data, the combined employee rate is 7.65% before Additional Medicare withholding, and the Social Security wage base is $184,500 in 2026. State withholding may also apply.
Why an Overtime Check Can Look Different
Payroll may calculate withholding by combining the payment with regular wages or using the current supplemental withholding rate (see IRS Publication 15). Your final annual income-tax liability is determined when you file.
Estimate overtime pay using your hourly rate and weekly hours.
Use the overtime pay calculator →Frequently Asked Questions
Is overtime taxed at a higher rate?
No. Overtime is regular income taxed at your marginal rate. It can push you into a higher bracket only if it significantly increases your annual income.
How much FICA on overtime?
The same 7.65% as regular wages, up to the Social Security wage base of $184,500 in 2026.
Does overtime affect my tax refund?
If your employer withholds using a supplemental-wage method, you may get a refund if your effective rate is lower. File a W-4 to adjust if needed.
Figures and methods are based on official-source data encoded in the calculator. Not tax advice. Review the methodology and consult a qualified professional for your situation.