The 1.5× reality
What overtime really pays after tax
Oregon requires time-and-a-half — 1.5× your regular rate — for every hour over 40 in a workweek for most employees, following the federal FLSA standard. A $25-an-hour worker earns $37.50 for each OT hour. But those $37.50 hours are taxed at the worker's marginal rate: the top brackets their income already fills. In the 22% federal and 8.75% Oregon brackets, roughly 39% goes to taxes, so each OT hour nets about $23 — still more than a regular hour, which is why overtime pays off, just not at the full 1.5×.
The calculator annualizes your regular hours plus OT, runs the total through Oregon's actual 2026 withholding formula, and reports the net difference. Use the 1.5× / 2× toggle for union or employer double-time policies.
The overtime table
Take-home with and without overtime
Single filer, one allowance, outside Portland's local-tax districts, 2026:
| Rate | Schedule | Gross | Net take-home | OT adds | Effective |
|---|---|---|---|---|---|
| $25.00 | 40 hrs | $52,000 | $40,240 | — | 22.6% |
| $25.00 | 40 + 5 OT | $61,750 | $47,256 | $7,016 | 23.5% |
| $25.00 | 40 + 10 OT | $71,500 | $53,814 | $13,575 | 24.7% |
| $32.00 | 40 + 8 OT | $86,528 | $63,128 | — | 27.0% |
| $40.00 | 40 + 8 OT | $108,160 | $76,039 | — | 29.7% |
Five OT hours a week at $25 raises gross by $9,750 but net by only about $7,016 — the effective rate on those extra hours is close to 28% once federal, Oregon, FICA and Oregon payroll taxes stack. The effective rate on the whole check still stays below the marginal rate because the lower-income brackets are filled first.
Oregon OT law
Overtime rules specific to Oregon
Beyond the 40-hour week, Oregon has a few OT wrinkles worth knowing:
- Daily OT in manufacturing: most manufacturing workers are entitled to overtime after 8 hours in a workday.
- OBBBA: the Oregon Benefit Budget Bargaining Act lets some employers deduct the value of certain benefits from overtime wages — a narrower, collective-bargaining-specific rule that rarely affects the standard estimate here.
- No double-time mandate: state law does not require 2× pay; the toggle exists for contracts and policies that pay it.
- Salaried exemptions: overtime applies to non-exempt workers. Many salaried professional, administrative and executive roles are exempt under federal rules.
OT and the brackets
Why each OT hour keeps less
Overtime is taxed at the marginal rate because every OT dollar is your highest dollar. As OT hours push your annual income into new federal and Oregon brackets, the incremental keep rate can fall even further. A single worker crossing the $125,000 Oregon phase-out while stacking OT loses federal-subtraction value as well — an added reason to verify large OT years in the calculator rather than multiply net pay by hours.
One offset: once your wages pass the $184,500 Social Security cap, OT stops paying the 6.2% SS tax — OT near year-end for high earners nets more per hour.
Your check
Estimating a single OT week
The calculator works in annual terms, which is the accurate way to handle progressive taxes. To estimate a single week: run your annual schedule (regular + typical OT) for the annual net, then divide by 52. If you want the marginal effect of one extra OT week, add it to your annual hours and compare. Withholding is computed per paycheck, so a spike week withholds more; the annual total still converges to the calculator's estimate.