W-2 code TT calculator: qualified overtime for 2026
Short answer: box 12 code TT is the FLSA overtime premium, the "half" of time and a half, worked out each workweek as 0.5 × regular rate × hours over 40. It must be on the 2026 Form W-2 of every employee paid FLSA overtime, due 1 February 2027. Work it out below for one week, or for the whole year from a payroll CSV. Everything runs in your browser.
One workweek
Whole year, every employee (CSV)
One row per employee per FLSA workweek. Columns: employee, week_ending, pay_date, pay_type,
hours_worked, straight_time_pay, optional salary_hours, other_pay, ot_hours. Bonuses that cover several weeks go in the
second box. What each column means.
Workweeks
Bonuses spread over several weeks (optional)
Get the kit ($29, accountants $99)
By situation
- Double time: Only the FLSA minimum premium is qualified overtime.
- State daily overtime (California and others): Overtime owed only because of state law, such as hours over 8 in a day, is not code TT.
- Tipped employees: For a tipped employee the regular rate includes the tip credit, so it is at least the minimum wage, not the cash wage.
- Salaried non-exempt employees: When a salary pays for a fixed number of hours, the regular rate is the weekly salary divided by those hours, and code TT is half that rate for each hour over 40.
- Fluctuating workweek: Under the fluctuating workweek method the salary pays for every hour worked, so the regular rate changes each week (salary ÷ hours worked) and code TT is half of it for each hour over 40.
- Nondiscretionary bonuses: A promised bonus (production, attendance, retention) is part of the regular rate.
- Piece-rate and day-rate pay: For piece-rate or day-rate pay the regular rate is the week's earnings (plus waiting time and bonuses) divided by hours worked, and code TT is half of it for each hour over 40.
- Hospitals (8/80) and police or fire (7(k)): When overtime is computed under another FLSA method, such as the hospital 8/80 system or a 7(k) work period for police and fire, code TT is the overtime premium actually paid under that method.
- Public-sector comp time: Comp time earned under FLSA 7(o) is not qualified overtime when it is earned.
- Exempt employees and owners: No.
- Weeks paid in the next year: Overtime counts in the year it is paid, under the same rules as wage withholding.
- Fixing a wrong code TT amount (W-2c): File and furnish Form W-2c as soon as you find the error, with the code and amount in both the previously reported and the correct box 12 fields.
By payroll software
- Gusto: Yes, for payroll run in Gusto.
- QuickBooks Online Payroll: Partly.
- QuickBooks Desktop Payroll: Partly.
- Patriot Payroll: Partly.
- OnPay: Partly.
- Square Payroll: Square has not published how it handles code TT for 2026.
What the IRS says goes in code TT
- Mandatory for 2026. Employers must report qualified overtime compensation paid in 2026 on Form W-2, box 12, code TT (FS-2026-13 Q10). The 2025 transition relief (employees could rely on other records when the employer did not report separately) does not carry over: "no relief is available for tax years after 2025" (Q20). Penalties for wrong or missing W-2s can apply (Q11).
- Only the half. The W-2 instructions: only the "half" portion of time-and-a-half goes in code TT. The straight-time pay for overtime hours stays ordinary wages.
- Each workweek on its own. Hours over 40 in the workweek × one-half × the FLSA regular rate (Q12). A workweek is a fixed, recurring 168 hours, and hours are never averaged over two weeks (Q13).
- The full amount, not the deduction. Report everything paid, even above the employee's $12,500 deduction limit (Q10).
- The year it was paid. Overtime counts in the year it is paid, under the same rules as wage withholding (Q3).
- Only what the FLSA requires. Double time, daily overtime, weekend or holiday premiums and union or state overtime count only up to the FLSA's minimum: $20 an hour for 50 hours gives $100 in code TT even when the employer paid double time (Q16).
- Hospital, police and fire schedules (FLSA 7(j), 7(k), 7(o)): report the overtime premium actually paid under that provision instead of recomputing it on 40 hours (Q17).
- Exempt employees: nothing. Overtime paid to FLSA-exempt staff is never qualified, whatever a contract or state law says; owners with 20% or more who manage the business count as exempt (Q4, Q5).
- Mistakes need a W-2c. An employer who finds a wrong code TT amount must file and furnish Form W-2c (Q11). Employees can deduct only what the W-2 shows, and Form 4852 can't replace it (Q20, Q22, Q23).
- Deadline. 2026 Forms W-2 go to employees and the SSA by 1 February 2027 (31 January is a Sunday), on paper or electronically (W-2/W-3 instructions).
What is not code TT
- Straight-time pay for the overtime hours (the "1" in 1.5).
- Anything above half the regular rate, such as the extra half of double time.
- Daily overtime, 35-hour, weekend, holiday or 6th/7th-day premiums in a week that stays at or under 40 hours.
- Overtime owed only under state law or a union contract.
- Any overtime paid to exempt employees, independent contractors or 20% owner-managers.
- Paid leave and holiday hours that weren't worked: they don't count toward the 40 hours.
- Discretionary bonuses (they stay out of the regular rate).
The regular rate
The FLSA requires time and a half of the employee's regular rate for every hour over 40 in a workweek. The regular rate is all pay for the workweek divided by the hours actually worked, except the payments the law itself excludes (29 CFR 778.109). Code TT is the half: 0.5 × regular rate × FLSA overtime hours. The straight-time pay for those hours is ordinary wages.
Included in the regular rate
- Every hourly rate the employee worked at, including shift differentials and different rates for different jobs (29 CFR 778.115).
- Nondiscretionary bonuses: production, attendance, safety, retention and sign-on bonuses promised in advance or tied to a standard (29 CFR 778.211).
- Commissions (29 CFR 778.117) and on-call pay (29 CFR 778.223).
Left out of the regular rate
- Discretionary bonuses (amount and timing decided by the employer alone at the end of the period) and gifts (29 CFR 778.211, 29 CFR 778.212).
- Pay for hours not worked: vacation, holidays, sick time (29 CFR 778.218).
- Expense reimbursements (29 CFR 778.217).
- Premium payments that the law lets you credit against overtime, such as time and a half for weekend or holiday work as such (29 CFR 778.202, 29 CFR 778.203).
Formulas by pay type
| Pay type | Regular rate | Code TT for the week | Source |
|---|---|---|---|
| Hourly, one rate | the rate (plus other pay ÷ hours) | 0.5 × rate × hours over 40 | 29 CFR 778.110 |
| Hourly, several rates or differentials | straight-time pay for all hours ÷ hours worked | 0.5 × regular rate × hours over 40 | 29 CFR 778.115 |
| Salary for fixed hours (say 40) | salary ÷ the hours it covers | 0.5 × regular rate × hours over 40 | 29 CFR 778.113 |
| Fluctuating workweek salary | salary ÷ hours worked that week | 0.5 × regular rate × hours over 40 | 29 CFR 778.114 |
| Bonus for several weeks | each week's share ÷ that week's hours, added to the week | 0.5 × (share ÷ hours) × that week's overtime hours | 29 CFR 778.209 |
Worked examples
- Hourly with a weekly bonus. 46 hours at $15 = $690, plus a $50 production bonus. Regular rate = $740 ÷ 46 = $16.087. Code TT = 0.5 × 16.087 × 6 = $48.26.
- Two rates. 30 hours at $12 and 15 hours at $20 = $660 for 45 hours. Regular rate = $14.667. Code TT = 0.5 × 14.667 × 5 = $36.67.
- Salary for 40 hours. $800 a week, 44 hours worked. Regular rate = $20. The four overtime hours are owed at $30; code TT is the half: 0.5 × 20 × 4 = $40.
- Fluctuating workweek. $600 salary, 50 hours. Regular rate = $12. Code TT = 0.5 × 12 × 10 = $60.
- Quarterly bonus. $260 over 13 weeks = $20 a week. In the week with 50 hours: 0.5 × (20 ÷ 50) × 10 = $2 more, paid with the bonus.
The offline calculator's "Load an example" button runs these numbers, so you can check it before you trust it with your own payroll.
CSV columns
Export hours and earnings per employee per workweek from your payroll or time system and rename the columns. Extra columns are ignored.
| Column | Needed | What to put in it |
|---|---|---|
employee | yes | Employee name or ID. Every row with the same value is one employee. |
week_ending | yes | Last day of the FLSA workweek (YYYY-MM-DD or M/D/YYYY). One row per employee per workweek: the fixed, recurring 7-day period you use for overtime, not the pay period. |
pay_date | recommended | Date the week's pay (including its overtime) was paid. Code TT counts overtime paid in the tax year, so a week ending in late December that is paid in January belongs on the next W-2. Without it the week_ending year is used. |
pay_type | yes | hourly (one or more hourly rates), salary_fixed (salary for a fixed number of hours) or fww (fluctuating workweek: a fixed salary for whatever hours are worked). |
hours_worked | yes | Hours actually worked in the workweek. Leave out paid time off, holidays and sick hours that were not worked. |
straight_time_pay | yes | Hourly: every hour worked at its own straight-time rate, shift differentials included, without the overtime premium. Piece-rate or day-rate pay: the week's piece or day earnings (use pay_type hourly). Tipped staff: cash wage plus the tip credit. Salary types: the weekly salary (monthly × 12 ÷ 52, semimonthly × 24 ÷ 52). |
salary_hours | salary_fixed only | Hours the salary is meant to pay for (default 40). |
other_pay | no | Pay earned in this workweek that must be in the regular rate: nondiscretionary bonuses (production, attendance, safety), commissions, on-call pay. Leave out discretionary bonuses, gifts, paid time off and expense refunds. Bonuses that cover several weeks go in the bonus box instead. |
ot_hours | no | Only if the FLSA overtime hours are not simply the hours over 40 in the week. Employees on a hospital 8/80 or public-safety 7(k) schedule: leave them out and use the premium your payroll paid under that schedule (FS-2026-13 Q17). Never enter state daily overtime here. |
ot_premium_paid | no | Overtime premium your payroll paid for the week, for your own comparison (not used in the math). |
Bonuses that cover several weeks
| Column | Needed | What to put in it |
|---|---|---|
employee | yes | Same value as in the workweeks rows. |
amount | yes | Nondiscretionary bonus amount (for example a quarterly production or retention bonus promised in advance). |
period_start, period_end | yes | The period the bonus was earned over. It is spread over the employee's workweeks in that period. |
pay_date | yes | When the bonus was paid. The extra overtime it creates is paid then, so it counts in that year. |
The calculator keeps the regular rate unrounded. The examples in 29 CFR 778 round it to the cent first, so a result can differ from them by a cent.
Questions
What is box 12 code TT on the 2026 W-2?
Qualified overtime compensation: the part of FLSA-required overtime pay above the regular rate, which is the half in time and a half. Employees use it for the 2025-2028 overtime deduction (up to $12,500, or $25,000 on a joint return).
Is code TT just overtime pay divided by three?
Only when the employee has one hourly rate, no bonus, and was paid exactly time and a half for hours over 40. Bonuses, shift differentials, several rates, salary or double time all change the regular rate or the minimum premium, so the amount must be worked out each workweek.
Do nondiscretionary bonuses change code TT?
Yes. A production, attendance or retention bonus is part of the regular rate. A bonus that covers several weeks is spread back over those weeks, and the extra half-time premium for the overtime weeks is qualified overtime, paid when the bonus is paid.
What about state daily overtime, like California's?
Only the FLSA's weekly overtime counts. Hours over 8 in a day are not code TT unless they also push the week over 40, and then only half the regular rate for the hours over 40 counts.
Is my payroll data uploaded?
No. The calculator runs in your browser; the CSV is read on your computer and nothing is sent to our server.
What if a W-2 already went out with the wrong amount?
File and furnish Form W-2c with the right box 12 code TT amount, entering the code and amount in both the previously reported and the correct fields.
Sources
- IRS FS-2026-13: Qualified overtime compensation FAQs (August 2026)
- IRS: 2026 General Instructions for Forms W-2 and W-3
- IRS Notice 2025-69
- eCFR: 29 CFR Part 778, overtime compensation
- US DOL Fact Sheet #56A: the regular rate of pay
A calculator, not tax or legal advice. It follows the IRS FAQs and the FLSA rules linked above; check unusual pay plans with your payroll provider or tax adviser. Facts checked 27 Oct 2026.