Tax Exemption on Overtime Pay, What HR needs to know for 2025
HR Digest
FEBRUARY 26, 2025
Overtime pay taxes, a boost for hourly workers The Fair Labor Standards Act (FSLA) already mandates that non-exempt employees receive time-and-a-half pay for hours over 40 in a workweek. However, federal income tax, along with Social Security and Medicare deductions, reduce the overall net gain.
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