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Alabama Overtime Calculator

Overtime in Alabama is withheld on at your normal federal rate: there is no separate overtime tax rate. Federal law sets overtime at 1.5× your regular hourly rate past 40 hours in a workweek, and those hours face federal income tax, FICA of 7.65%, and Alabama's graduated income tax (2% to 5%) in 2026, though the federal premium is now deductible when you file.

Is overtime taxed in Alabama?

Yes, but not at a special rate: overtime in Alabama is withheld on in the same federal brackets as regular wages plus Alabama's graduated income tax (2% to 5%). For 2025-2028 the federal premium, the "half" of time-and-a-half, is also deductible when you file, up to $12,500 ($25,000 married filing jointly). Bigger checks can have more withheld up front because withholding is calculated per paycheck, but that evens out on your tax return. Against the 4 states Alabama borders, the same ten overtime hours a week is worth $14,193 here: Florida keeps $975 more ($15,168), Tennessee keeps $975 more ($15,168), Mississippi keeps $195 more ($14,388) and Georgia leaves $37 less ($14,156). Florida, Mississippi and Tennessee are the only borders worth crossing for the tax alone.

See what your overtime hours actually add

Estimated take-home

$55,745 /yr

$2,144 per paycheck · $4,645/moFor $25/hr, 40 + 10 overtime hrs a week · Alabama · local tax not included · single

Take-home 78%Taxes 22%

Calculation breakdown

  • Gross salary$71,500.00
  • Federal income tax−$6,900.00
  • FICA (Social Security & Medicare)−$5,469.75
  • State income tax (Alabama)−$3,385.00
  • Total take-home$55,745.25

Gross includes regular and overtime pay; see detailed inputs for per-paycheck splits.

Estimate based on 2026 federal and Alabama tax rules updated Oct 2026 How we calculate

Your details

Not included
More options Deductions & details · optional
Overtime adds $14,193/yr: you keep 72.79% of each overtime dollar.
No tax on overtime: $6,500 of this overtime is the deductible “half”. Claimed on your federal return, that's about $1,280 more back at tax time. See your refund →

What overtime hours are actually worth in Alabama

On top of full-time pay at $25 an hour ($52,000 a year) in Alabama, here is what each extra dollar survives federal tax, Alabama income tax and FICA in 2026:

Overtime workedGrossAlabama taxYou keepShare kept
5 OT hours a week$9,750$488$7,34775.3%
10 OT hours a week$19,500$975$14,19372.8%
15 OT hours a week$29,250$1,463$20,56570.3%

Alabama takes about 5.0% of that money on top of the 15% federal marginal rate and 7.65% FICA.

How Alabama ranks on overtime hours

Across all 50 states and DC, Alabama ranks 33rd for what ten overtime hours a week leaves in 2026. That is $67 less than the median state ($14,260), and $848 more than Oregon, where the same ten overtime hours a week leaves $13,345.

The best outcome anywhere is $15,168 in Alaska and the other states with no wage income tax, $975 more than Alabama keeps.

Alabama overtime hours against the states next door

Crossing a state line changes what the same overtime hour is worth without changing what you are paid. Here is ten overtime hours a week in Alabama against the states it borders:

StateState income taxYou keepvs Alabama
Alabama$975$14,193—
FloridaNone$15,168$975 more
Georgia$1,012$14,156$37 less
Mississippi$780$14,388$195 more
TennesseeNone$15,168$975 more

Local income tax on overtime hours in Alabama

3 jurisdictions in Alabama levy an income tax of their own on top of the state rate. The calculator above does not include them, so add this if you live or work in one:

JurisdictionResident rateCost on $71,500
Gadsden2.00%$1,430
Birmingham1.00%$715
Bessemer1.00%$715

How overtime is taxed in Alabama

Short answer: no: Alabama does not tax overtime at a higher rate, and neither does the IRS. Overtime pay (1.5× your regular rate past 40 hours/week) is withheld on as ordinary income in the same federal and Alabama brackets as the rest of your wages. Big overtime checks can have more withheld up front because withholding is calculated per paycheck, but that evens out on your tax return. Here's the full picture.

  • Overtime rate is 1.5× your regular pay: Federal law requires at least 1.5 times your regular hourly rate for hours worked beyond 40 in a workweek. Some states and employers offer higher rates.
  • Withheld as ordinary income: There is no special tax rate for overtime pay. It's added to your regular wages and withheld on through the same federal brackets plus Alabama's graduated income tax (2% to 5%).
  • The premium is deductible federally (2025-2028): When you file, the extra half of time-and-a-half the FLSA requires comes off your federal taxable income: up to $12,500, or $25,000 married filing jointly, phasing out above $150,000 of income. Social Security and Medicare still apply.
  • Higher income can mean higher withholding: Because overtime increases your total paycheck, your employer annualizes the higher amount when calculating withholding, which can result in a higher rate on the overtime portion.
  • You always take home more by working overtime: Even in a high tax bracket, you keep more than 50% of each overtime dollar. Higher taxes on overtime never mean you'd be better off working fewer hours.

Enter your hourly rate and overtime hours below to see your exact Alabama take-home pay after all taxes.

Frequently Asked Questions

On your paycheck, overtime in Alabama is ordinary wages: there is no special overtime tax rate. It's withheld on through Alabama's graduated income tax (2% to 5%) along with the rest of your wages, and because overtime raises the pay period's total, a larger percentage of each overtime dollar may be withheld. The federal overtime deduction you claim at filing doesn't change Alabama's withholding, which still applies to every overtime dollar.

Not fully. For 2025-2028 the federal premium, the "half" of time-and-a-half, is also deductible when you file, up to $12,500 ($25,000 married filing jointly). It's claimed on Schedule 1-A, phases out above $150,000 of income ($300,000 joint), and doesn't reduce Social Security or Medicare. It's a federal deduction, so don't assume Alabama income tax follows it. Your employer still withholds on overtime unless you claim the deduction on a new W-4, so for most people it shows up as a bigger refund.

Overtime can push your annualized income into a higher bracket, but only the dollars above the threshold are taxed at the higher rate: you always take home more by working the hours. Priced for Alabama: five overtime hours a week is worth $7,347 a year after tax, ten overtime hours a week is worth $14,193 a year after tax, fifteen overtime hours a week is worth $20,565 a year after tax, against $19,500 gross on the middle figure.

Under the Fair Labor Standards Act, non-exempt employees must be paid at least 1.5× their regular rate beyond 40 hours in a workweek. Alabama adds no daily-overtime rule on top of that federal floor. The calculator uses the standard 1.5× multiplier.

Alabama follows the federal FLSA standard: at least 1.5× your regular rate for hours beyond 40 in a workweek, with no additional daily-overtime requirement. If you believe you're owed overtime, the Alabama Department of Labor is the place to check. Our calculator uses the standard 1.5× multiplier.

Add regular earnings (rate × regular hours) to overtime earnings (rate × 1.5 × overtime hours), then subtract federal tax, Alabama income tax and FICA. In Alabama that leaves about 72.8% of each overtime dollar: $14,193 of the $19,500 that ten overtime hours a week adds over a year.

Against the 4 states Alabama borders, the same ten overtime hours a week is worth $14,193 here: Florida keeps $975 more ($15,168), Tennessee keeps $975 more ($15,168), Mississippi keeps $195 more ($14,388) and Georgia leaves $37 less ($14,156). Florida, Mississippi and Tennessee are the only borders worth crossing for the tax alone.

Alabama's combined sales tax rates can reach 9%-11% in some areas (4% state plus up to 7% local). A $200 weekly grocery bill includes $18-$22 in sales tax, and someone spending $40,000 annually on taxable goods pays $3,600-$4,400 in sales tax. This can offset or exceed income tax savings for big spenders, especially lower-income workers who spend a larger percentage of income on taxable goods.

Alabama's three brackets cover only $6,000 total (for married filers), meaning virtually everyone earning above $15,000 pays the top 5% rate on almost all income. A $30,000 earner pays the same effective rate (around 5%) as someone earning $150,000. The 'progressive' label is technically accurate but practically irrelevant: Alabama effectively operates like a flat 5% tax state for most taxpayers.

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