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
✅ 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.