Time Card Calculator with Overtime Rules by State (2026)

Updated June 2026 • FLSA rules • OBBBA overtime deduction • TruePayCalc
Federal law requires overtime pay after 40 hours per week. California and a handful of other states require overtime after 8 hours in a single day. The One Big Beautiful Bill Act of 2025 added a new federal overtime deduction worth up to $12,500 per year — but only on the premium portion of FLSA-required overtime, claimed on your tax return.

Federal Overtime Rules (FLSA) — 2026

The Fair Labor Standards Act is the federal overtime law that applies to most employees in the United States. Key rules:

Overtime Pay Calculation Example

Here is how to calculate a week with regular hours and overtime:

ComponentCalculationResult
Regular hours (40)40 × $22.50/hr$900.00
Overtime hours (6)6 × ($22.50 × 1.5)$202.50
Total Gross Pay$1,102.50
OT premium only (for deduction)6 × $11.25 (the extra 0.5x)$67.50 (deductible)

The overtime premium (the $67.50 in this example) is the portion that qualifies for the new OBBBA federal deduction, up to $12,500/year.

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State Overtime Rules (2026)

Most states follow federal FLSA overtime rules. A few states have stricter requirements that apply in addition to federal law:

StateDaily OT RuleWeekly OT RuleDouble Time?
CaliforniaAfter 8 hrs/day; after 12 hrs = double timeAfter 40 hrs/weekYes — after 12 hrs/day or 7th consecutive day
NevadaAfter 8 hrs/day (if earning under 1.5x min wage)After 40 hrs/weekNo
AlaskaAfter 8 hrs/dayAfter 40 hrs/weekNo
All other statesNo daily OT ruleAfter 40 hrs/week (FLSA)Only if agreed upon

Important: State overtime requirements that are stricter than FLSA must be followed. Only FLSA-required overtime (not state-mandated daily OT) qualifies for the 2026 OBBBA federal overtime deduction.

The 2026 "No Tax on Overtime" Deduction (OBBBA)

The One Big Beautiful Bill Act, signed July 4, 2025, created a temporary federal income tax deduction on qualifying overtime pay. Here are the exact rules, sourced from IRS guidance and the PayrollOrg OBBBA summary:

How to Verify You Were Paid Correctly

If you worked overtime, here is a quick check to verify your gross pay is correct:

  1. Count total hours worked in the workweek (Sunday through Saturday, or your employer's designated week).
  2. Multiply the first 40 hours by your regular rate.
  3. Multiply any hours above 40 by your regular rate × 1.5.
  4. Add both amounts. Compare to your gross pay on your stub.
  5. If your state has daily OT rules (CA, NV, AK), also check hours worked each day.

If your stub shows less than this calculation, you may be owed additional pay. Document the discrepancy and raise it with your payroll department first. Persistent underpayment may be reported to your state labor board or the U.S. Department of Labor.

Frequently Asked Questions

When does federal overtime start?

Federal overtime under the FLSA is required for non-exempt employees who work more than 40 hours in a single workweek. The overtime rate must be at least 1.5 times the regular rate. FLSA does not require daily overtime — only California, Nevada, and Alaska have mandatory daily overtime rules.

Is overtime taxed at a higher rate?

No. Overtime is taxed at the same federal and state rates as regular pay. The One Big Beautiful Bill Act created a new deduction of up to $12,500 per year for single filers on qualifying FLSA overtime premium pay, claimed on your annual tax return. Your employer still withholds income tax from overtime paychecks during the year.

Which states require daily overtime?

California requires overtime after 8 hours worked in a single day and double time after 12 hours. Nevada requires daily overtime after 8 hours for employees earning below 1.5 times the minimum wage. Alaska requires daily overtime after 8 hours. All other states follow the federal FLSA standard of weekly overtime only after 40 hours.

Does the OBBBA overtime deduction apply to California daily overtime?

No. The OBBBA overtime deduction applies only to overtime required by the federal FLSA — hours above 40 per week. California's daily overtime rules (after 8 hours per day) are not covered by the OBBBA deduction. Only the FLSA weekly overtime premium qualifies.

How do I know if I am exempt from overtime?

Most salaried employees earning more than $684 per week ($35,568 per year) are potentially exempt from FLSA overtime, but job duties also matter. Executive, administrative, and professional employees may be exempt. Job title alone does not determine exempt status — actual duties do. If you are uncertain, consult your HR department or an employment attorney.

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