How do I add overtime reporting to my employees' W2s?
If you pay overtime and would like these calculations enabled for your company and the applicable overtime amounts reported on employee form W2 (box 12), here is what you need to do.
The One Big Beautiful Bill Act (OBBBA) created a temporary federal income tax deduction for certain qualified overtime compensation earned during tax years 2025 through 2028.
To ensure accurate payroll reporting, Evolution Payroll Services must collect information regarding your overtime pay practices in order to include this information in your employees' W2s.
First, you only need to do this if your company pays overtime wages. If you pay overtime and would like these calculations enabled for your company and the applicable overtime amounts reported on employee form W2 (box 12), you MUST complete and return this questionnaire.
Some information you'll want to have handy includes:
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Your overtime pay rate (keep in mind the "no tax" provisions only apply to the FLSA mandated portion for overtime pay. In other words, the "and a half" portion of overtime pay).
- Other premium pay rates. Examples include:
- Holiday premium pay
- Double-time pay
- Shift premiums
- Union contract premiums
- Daily overtime required by state law
- Other company-specific premium pay arrangements
The following types of premium pay generally do not qualify for "No Tax on Overtime" benefits:
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State-mandated overtime that differs from federal FLSA overtime requirements
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Contractual overtime required by union agreements or employment contracts
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Company overtime policy not required under the FLSA
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Voluntary or incentive-based overtime premiums