No Tax on Overtime Calculator for Construction Workers
Construction is one of the most overtime-heavy industries in America. Long hours on the job site are the norm, and now under the OBBBA 2026 overtime tax deduction, the FLSA overtime premium (not every OT dollar) may qualify for a Schedule 1-A deduction up to $12,500 ($25,000 joint). Whether you're framing houses or pouring concrete, this calculator shows you exactly how much you save.
Your Construction Worker Overtime Tax Calculator
Pre-filled with typical values for construction workers. Adjust to match your actual earnings.
Your Annual Tax Savings
Tax Notes for Construction Workers
- Construction workers are covered by the FLSA and must be paid 1.5× for hours exceeding 40 per week — the FLSA overtime premium on those hours may qualify for a Schedule 1-A deduction under the OBBBA (cap $12,500 / $25,000 joint).
- FICA taxes (6.2% Social Security + 1.45% Medicare) still apply to overtime earnings — the deduction covers federal income tax only.
- Prevailing wage jobs (Davis-Bacon Act projects) often have higher base rates, which means even larger overtime savings when the 1.5× multiplier is applied.
- The overtime deduction applies to all W-2 construction employees — laborers, carpenters, ironworkers, concrete finishers, and all trades.
Three Calculation Examples for Construction Workers
Moderate OT — General Laborer
A general construction laborer working 10 hours of overtime per week at 1.5× rate ($33/hr OT). Gross OT pay: $15,840 · Qualified premium ≈ $5,280 (Schedule 1-A; cap $12,500 single / $25,000 joint — not full OT exempt).
Regular OT — Skilled Carpenter
A skilled carpenter working 15 hours of overtime per week at 1.5× rate ($42/hr OT). Annual overtime pay: $31,500 — saving over $6,900 at the 22% bracket.
Heavy OT — Foreman
A construction foreman working 20 hours of overtime per week at 1.5× rate ($52.50/hr OT). Annual overtime pay: $52,500 — significant tax savings under the OBBBA.
Frequently Asked Questions
Does construction overtime qualify for the OBBBA deduction?
Qualified overtime compensation from overtime hours worked beyond 40 per week by W-2 construction employees may be deducted on Schedule 1-A (FLSA premium only, subject to the $12,500 / $25,000 cap) — not a blanket deduction of full OT wages. This applies to every construction trade — general laborers, carpenters, electricians, plumbers, ironworkers, and more.
What about double-time pay on weekends or holidays?
Double-time (2×) pay qualifies as overtime compensation under the OBBBA if it is paid for hours exceeding 40 in the workweek. Many union contracts specify double-time for Sundays and holidays — all of that premium pay is federally deductible (caps and income limits apply).
I work prevailing wage jobs — does that affect the deduction?
No. Prevailing wage (Davis-Bacon) rates do not affect your eligibility. The overtime deduction applies to the overtime premium regardless of your base rate. Higher regular rates do increase the FLSA half-premium — still subject to the $12,500 / $25,000 Schedule 1-A cap.
Does per diem or travel pay count as overtime?
No. Per diem, travel allowances, and subsistence pay are not overtime compensation. Only hours worked beyond 40 per week that are paid at the overtime premium rate (1.5× or higher) qualify for the OBBBA deduction. Per diem is typically tax-free already under different IRS rules.
Related Tools and Resources
Use the full No Tax on Overtime Calculator for any profession. Also check the No Tax on Tips Calculator if you also earn tips, and the OBBBA FAQ for answers on eligibility, filing, and FICA taxes.
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