[Kelley]

I’ve heard that there’s a new policy coming (or already in effect) where overtime pay will not be taxed, but I’m not entirely sure how it’s supposed to function in practice.

Does it mean that *all* overtime income will be completely tax-free, or is there a limit or specific conditions attached?

Will it apply to both public and private sector employees? Also, how will this affect income tax brackets or social insurance deductions?

If anyone has a clear understanding—maybe from an official source, employer communication, or personal experience—it would be really helpful to break it down in simple terms.

I’m especially interested in knowing when it’s starting (or if it already has), who exactly qualifies, and what to expect on payslips.

Appreciate any insights—thanks in advance!

[Erisvaldo]

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[Sherie]

It will be a deduction not a paycheck increase and it pertains to certain amounts.

Based on the complexity of this – I don’t think this will pass.

[Sarah]

If you can work from home or you need a side hustle please let me know because we have lots of openings.

You can also work around your children as well.

Hope this helps

[Gil]

Does it mean the employer doesn’t get a deduction for overtime salaries of the employee doesn’t pick it up as income?

[Keddie]

The new budget triggers the PAYGO Act, which could lead to automatic Medicare spending cuts unless Congress acts to waive them.

This risks reduced funding for critical services that millions of seniors rely on.

[Chris]

People believe he’s doing them a favor. You have to look at the big picture.

Overtime will go away if this happens.

[Farre]

Likely, people either won’t be allowed to work overtime, or the contracts will change so that there isn’t overtime.

[Kelli]

“Both tax exemptions are structured as deductions that workers would claim when they filed their taxes the following year.

That means employers would still withhold money for tax payments on tips or overtime through their regular paychecks, but the income would be deductible from their final tax bills when they filed their annual taxes.”

Most notably this is a temporary provision that expires in 2028.

[Jeramy]

The idea is that your payroll will continue to be deducted.
When you file your taxes if you are Single and make less than 100k you can take a 10k deduction.

If you earn over 100k you don’t qualify
If you are married the income limit is raised to 200k with a 20k deduction.

If your income is over 200k than you don’t qualify.

Then of course if your salary is already over the income restrictions than you automatically don’t qualify

[Susan]

I’m still trying to figure out the logic of back of house restaurant staff, usually making minimum wage, will pay taxes on all their earnings, yet the front of house servers, will only be paying taxes on their very low hourly wage, but not on the much larger tip wage
They receive.

Someone make this make sense?

[Mark]

I work 40 hours, you work 50. We both pay the same taxes. I work 40 hours this week and 40 the next. You work 80 hours this week and take next week off.

We both worked the same 80 hours for 2 weeks but you make more money and pay less taxes.

I have a problem with this.

[Ben]

I’m salaried exempt so it wouldn’t affect me. If they passed a bill ending overtime exemption, that would help us a lot more

[Chris]

Here in Alabama overtime is simply not taxed. So overtime is categorized as overtime and the payroll system will not tax all time entries categorized as overtime.

We are required to supply the reports to the appropriate taxing authorities.

[Windy]

In reading the coding you will only not be taxed on the amount over you regular hour wage.

Example if you make $20 an hour regular and $30 an hour overtime you will only be exempted $10 an hour on your overtime.

So not exactly completely tax free.

This is the way things get spun that make you think your getting a real good deal.

I hate when we are manipulated!

[Chris]

well, yes, I can explain it. if republicans are describing the bill as eliminating tax on overtime, that means the bill won’t work like that.

I hope this helps

[Author]

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