Hourly pay is harder to predict than a salary, because withholding is worked out per paycheck rather than per year. This hourly paycheck calculator takes your rate and the hours you actually worked and shows what lands in your account, including overtime at time and a half.
The thing that surprises people is not the amount. It is that a big week seems to be taxed more heavily than a normal one. That is real, it is temporary, and it is worth understanding before you conclude your employer has made a mistake.
Why an overtime week is taxed harder
The IRS percentage method annualizes whatever you were paid this period, as though every paycheck for the year looked like this one. Work a heavy week and the calculation assumes you will work heavy weeks for the next fifty-one, lands you higher up the withholding table, and takes accordingly.
Here is what that does to $25 an hour, paid every two weeks:
- A normal 80 hour period pays $2,000 gross, and about $156 goes to federal tax, roughly 7.8%.
- Add 10 overtime hours and gross goes to $2,375. Federal tax rises to about $201, so the extra $375 was taxed at 12%.
- Add 25 overtime hours and gross reaches $2,937. Now the last of it is being taxed at 22%, because annualized it looks like a $76,000 salary.
Worth knowing: overtime is not taxed at a special rate. It is taxed as though you always earned that much, which is not the same thing. If the rest of your year is normal you have over-withheld on that one paycheck, and it comes back as a larger refund.
What this calculator does and does not check
It works out what your employer should withhold from the hours you enter. It does not check whether those hours were paid correctly in the first place, which is a different question with a different answer.
If you want to know whether your overtime rate itself is right, particularly if you receive bonuses or shift differentials, the overtime calculator handles that. The two together cover both halves: what you are owed, and what reaches your account.
Overtime and the forty hour week
Federal law requires time and a half beyond forty hours in a week, and this calculator applies that rate to the overtime hours you enter. Some states are more generous. California requires time and a half beyond eight hours in a single day and double time beyond twelve, which this calculator does not model, so a Californian working long days will be owed more than shown here.
Getting a closer figure
Two things move the answer more than anything else you can change. Pick your state, because state tax ranges from nothing at all to over 10%. And enter your pre-tax deductions, since a 401(k) contribution or health premium comes out before tax is worked out and lowers the bill as well as the paycheck.
If your hours vary a lot week to week, run a typical period rather than your best one. The annualizing effect means a good week will always overstate what you keep across the year.
Hourly paycheck calculator FAQ
No. Overtime is taxed at the same rates as the rest of your pay, but withholding is worked out per paycheck as though every period looked like that one. A heavy week therefore looks like a higher salary to the withholding table and more is taken. If the rest of your year is normal, the difference returns as a larger refund.
Usually the annualizing effect rather than an error. On $25 an hour, 10 overtime hours in a period draws federal tax at 12% on the extra, and 25 overtime hours pushes part of it to 22%, because the calculation treats that single paycheck as your normal earnings.
On a 40 hour week with no state income tax, about $1,691 every two weeks after federal tax and FICA, from $2,000 gross. In a state with income tax, expect $80 to $200 less per period depending on where you work. Enter your state above for a closer figure.
Yes, if you pick your state. All 51 jurisdictions are covered, including city income taxes in Michigan, New York and Oregon, and disability and paid leave contributions in the states that deduct them.