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Arizona Overtime Tax Deduction Calculator

Hourly workers in Arizona.

The short answer: The numbers below are a realistic Arizona scenario: a $2,640 deduction, about $317 in federal tax saved at the 12% bracket, or $12 per biweekly paycheck. Adjust the inputs to match your pay stub.

$

Regular rate (not OT rate)

Hours worked beyond 40/week

$

Modified Adjusted Gross Income

Overtime Premium Deduction

$2,640

Est. Federal Tax Savings (12% bracket)$317

✅ You qualify for the full deduction

⚠️ This calculator provides estimates for informational and educational purposes only. It is not tax advice. Results are based on the One Big Beautiful Bill Act (OBBBA) and IRS Schedule 1-A. Consult a qualified tax professional for your specific situation.

Where Arizona Overtime Actually Comes From

Arizona follows the FLSA with one of the nation's higher minimum wages.

  • • Arizona OT: 1.5× after 40 hours/week (FLSA-aligned)
  • • Arizona's minimum wage is among the higher state floors — tips-eligible roles aside, bases are up
  • • Semiconductor build-out (Chandler/Tempe), construction, and healthcare drives OT demand

Worked Example

A single AZ construction worker at $22/hour with 240 OT hours — the exact numbers are editable.

  • • Premium portion: $22 ÷ 2 = $11.00/hour on OT hours
  • • Deduction: $2,640 (watch the cap and MAGI phase-out as you raise the inputs)
  • • Federal income tax savings: $317 at the 12% marginal rate

Keep Reading

Frequently Asked Questions

Does Arizona have daily overtime?

No — weekly 40-hour threshold only.

Chip-fab construction schedules — same rules?

Yes — 1.5× past 40/week qualifies wherever you're W-2 hourly.

What if my employer pays double time instead of time-and-a-half?

The deduction covers the premium portion of pay treated as overtime beyond 40 hours — run the premium dollars your payroll actually reports as OT.