2026 Overtime vs. Bonus Tax Calculator

Separate your deductible 0.5x overtime premium from non-deductible flat bonuses and see your true 2026 refund.

0.5x Half-Time RuleOnly the 0.5x FLSA overtime premium is tax-deductible on Schedule 1-A.

22% Flat Bonus TrapDiscretionary bonuses are withheld at 22% and do not qualify for Code TT.

RDO & Production BonusesNondiscretionary bonuses raise your FLSA regular rate and boost Code TT.

Part I · Supplemental Pay Type (Bonus, Commission, Severance, or Overtime)

Employee / Taxpayer Name * Printed on the PDF audit worksheet header Enter an employee or taxpayer name.

Supplemental Pay Classification Determines FLSA 29 CFR § 778.209 overtime impact

State Supplemental Withholding Rate Statutory state bonus withholding rate

Gross Bonus / Commission / Severance ($) * Enter $0 to $5,000,000 supplemental payout Enter a valid dollar amount ($0 to $5,000,000).

Pre-Tax 401(k) Deferral on Bonus (%) Reduces 22% federal withholding & MAGI (0% to 80%) Enter a 401(k) deferral percentage between 0% and 80%.

Actual 2026 Federal Marginal Tax Bracket Compares 22% withholding vs. actual April 15 tax owed

Part II · Time-and-a-Half Overtime & 29 CFR § 778.209 FLSA Bonus True-Up (W-2 Code TT)

Base Hourly Rate ($/hr) * Regular straight-time wage ($7.25 to $250) Enter an hourly wage between $7.25 and $250.00.

Overtime Hours / Week * Hours worked over 40 per FLSA week (0 to 60) Enter weekly overtime hours between 0 and 60.

Weeks in Bonus Earning Period * 1 = Weekly, 4 = Monthly, 13 = Quarterly, 52 = Annual Enter 1 to 52 weeks in the bonus period.

Overtime Weeks Worked / Year Weeks with FLSA overtime in 2026 (1 to 52)

2026 Payroll & Schedule 1-A Summary

Treas. Reg. § 31.3402(g)-1 & 29 CFR § 778.209

Form W-2 Code TT

A · Net Supplemental Bonus / Commission Paycheck

Gross Supplemental Payout$8,000.00

FLSA § 778.209 Bonus Overtime True-Up (0.5x)+$666.67

Pre-Tax 401(k) Deferral (W-2 Code D)-$520.00

Federal Supplemental Withholding (22% / 37%)-$1,792.27

FICA Taxes (6.2% SS + 1.45% Medicare)-$662.99

State Supplemental Withholding-$422.81

Estimated Take-Home Net Bonus Check$5,268.60

B · Time-and-a-Half & W-2 Box 12 Code TT Deduction

1.5x Time-and-a-Half Rate / 2.0x Double-Time$48.00/hr · $64.00/hr

Annual 1.5x Overtime Pay (Base Hourly)$19,200.00

Base 0.5x FLSA Premium (W-2 Code TT)$6,400.00

Bonus FLSA § 778.209 0.5x True-Up (Adds to Code TT)+$666.67

Total 2026 W-2 Box 12 Code TT Deduction

$7,066.67 Saves $1,554.67 Federal Tax

2026 Federal Supplemental Tax & FLSA Overtime Rules by Payout Type

Comparison of 2026 IRS Supplemental Wage Withholding (Treas. Reg. § 31.3402(g)-1) and FLSA Overtime W-2 Box 12 Code TT Eligibility
Pay Type	2026 Federal Withholding Rate	Increases FLSA Regular Rate?	Qualifies for W-2 Box 12 Code TT?
Time-and-a-Half Overtime (1.5x)	Standard W-4 Payroll Bracket	Base 1.0x sets the Regular Rate	Yes (0.5x FLSA half-time premium up to $12.5k / $25k MFJ)
Non-Discretionary Bonus (KPI / Production / Safety)	22% Flat (up to $1M) / 37% (>$1M)	Yes (29 CFR § 778.209)	Yes (The 0.5x overtime true-up on the bonus adds to Code TT)
Sales / Production Commissions	22% Supplemental or Aggregate W-4	Yes (29 CFR § 778.117)	Yes (0.5x commission overtime allocation adds to Code TT)
Discretionary Holiday / Spot Bonus	22% Flat (up to $1M) / 37% (>$1M)	No (29 CFR § 778.211)	No (Standalone bonus is not FLSA overtime)
Severance Pay / Separation Package	22% Flat Supplemental Withholding	No (Post-employment severance)	No (Taxed as supplemental W-2 Box 1 wages)