Is double time tax-free?
The cash is not tax-free. At most, a half-time premium on FLSA-required overtime hours can be deducted, subject to the cap and the phase-out. The second full multiple is ordinary wages.
Eight hours at $20 paid at double time is $320.00. The half-time slice is $80.00. The rest of the check is not the federal overtime deduction.
Double-time pay
$320.00
Double-time pay is $320.00. The half-time piece is $80.00.
How the total splits
Double time is 2×. The federal deduction is still only a half-time premium, and only when FLSA required the hours.
| Double-time pay | $320.00 |
|---|---|
| Half-time slice | $80.00 |
| Rest of the check | $240.00 |
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Pay = hours × rate × 2. Half-time slice = hours × rate × 0.5.
Double time means the hour pays two times the rate. Qualified overtime compensation is the premium the Fair Labor Standards Act requires, which for a weekly overtime hour is half the rate, not the full extra rate.
A state or a contract can require the second full multiple. That extra multiple is still wages. It is not automatically qualified overtime. This page shows the half-time slice so it is not confused with the cash total. It does not decide whether your state required the double time.
| Double-time pay | $320.00 |
|---|---|
| Half-time slice | $80.00 |
The cash is not tax-free. At most, a half-time premium on FLSA-required overtime hours can be deducted, subject to the cap and the phase-out. The second full multiple is ordinary wages.
This page does not apply California's daily rules. Federal qualified overtime follows the FLSA premium. A daily or double-time premium a state requires on top of that is not automatically the same deduction.
Take the half-time slice, not the double-time total, to the no-tax-on-overtime calculator. That page applies the $12,500 cap, the joint cap, and the phase-out.