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No Tax on Tips & Overtime Calculator (2025 Law)

See how much the 2025 'no tax on tips' and 'no tax on overtime' deductions cut your federal tax — caps and income phase-out included.

  • No upload
  • Browser-based
  • Free
  • No signup
$

Only the extra "half" above your regular rate counts. For time-and-a-half pay, that's your total OT pay ÷ 3.

$

Voluntary cash/charged tips reported to your employer. Enter 0 if none.

$

Your total income. Deductions shrink above $150k single / $300k joint.

%

Your top federal bracket (10, 12, 22, 24, 32, 35 or 37).

Estimated federal tax saved
$0
—
  • Overtime deduction$0
  • Tips deduction$0
  • Total deduction from taxable income$0
  • Phase-out reduction applied$0

Estimate only — deductions apply to federal income tax for 2025–2028; tips and overtime are still subject to Social Security, Medicare and (usually) state tax. Runs entirely in your browser.

Generated entirely in your browser.

How to use No Tax On Overtime Calculator

  1. Pick your filing status — single/other or married filing jointly — since the overtime cap and phase-out thresholds differ.
  2. Enter your yearly overtime premium (the extra half above your regular rate; total time-and-a-half pay ÷ 3).
  3. Enter your qualified tips for the year, or leave it at 0 if you don't earn tips.
  4. Enter your modified AGI so the tool can apply the high-income phase-out, then set your marginal federal tax rate.
  5. Read the estimated federal tax saved at the top, with the deduction breakdown below.

Common use cases

  • Hourly and shift workers. See what the overtime deduction is worth after the $12,500/$25,000 cap on a year of extra shifts.
  • Tipped service staff. Estimate the tax saving from up to $25,000 of reported tips for servers, bartenders, drivers and stylists.
  • Planning withholding. Use the estimated saving to decide whether to adjust your W-4 or set money aside for tax time.
  • Higher earners. Check how much of the deduction survives the phase-out once your income climbs above $150k/$300k.

Tips

  • Enter only the overtime premium, not your full overtime paycheck — the base-rate portion of overtime is still taxable.
  • For time-and-a-half pay, the deductible premium equals total overtime pay divided by three.
  • The tips cap is $25,000 for both single and joint filers; only the overtime cap doubles to $25,000 when filing jointly.
  • These deductions apply to tax years 2025 through 2028 under current law.

Troubleshooting

My deduction is smaller than what I entered — why?
Either you hit the annual cap ($12,500/$25,000 for overtime, $25,000 for tips) or the income phase-out reduced it because your MAGI is above $150k single / $300k joint.
The result shows $0 saved.
Set a marginal tax rate above 0%, make sure you entered a premium/tips amount, and check that your income hasn't fully phased out the deduction.

Frequently asked questions

How much overtime pay is tax-free under the 2025 law?
Only the overtime 'premium' — the extra half above your regular rate — is deductible, up to $12,500 (single) or $25,000 (married filing jointly) per year. If you're paid time-and-a-half, the premium is your total overtime pay divided by three.
How much of my tips can I deduct?
Qualified tips are deductible up to $25,000 per year. The deduction is the same $25,000 cap whether you file single or jointly, and it applies on top of the overtime deduction.
Does a high income reduce the deduction?
Yes. Both deductions phase out once your modified AGI passes $150,000 (single) or $300,000 (joint), shrinking by $100 for every $1,000 of income above that — so about 10 cents per extra dollar.
Do tips and overtime become completely tax-free?
No. These are federal income-tax deductions for 2025–2028 only. Your tips and overtime are still subject to Social Security and Medicare (FICA) taxes and, in most states, state income tax.
Is anything I enter uploaded?
No. The calculator runs entirely in your browser and nothing you type is sent to a server.