Answer
Your payslip shows the full overtime pay you earned, calculated at the time-and-a-half rate. However, under the One Big Beautiful Bill Act (OBBBA), only the extra half-time premium portion of overtime is considered qualified overtime and reported separately on your W-2. In the example below, the year-to-date overtime amount on the payslip would show $225.00, of which $75.00 is the qualified overtime premium amount reportable on the W-2.
Example employee has an hourly rate of $15.00 and works 10 overtime hours in a week.
- $15.00 x 10 Overtime Hours: $150.00 straight time
- $15.00 x 0.5: $7.50 overtime premium rate
- $7.50 x 10 Overtime Hours: $75.00 overtime premium
- Paystub Total: $150.00 straight time + $75.00 overtime premium = $225 time-and-a-half
- W-2 Total: $75.00 overtime premium