Alabama Overtime Calculator

Alabama does not have a state overtime statute and has no state minimum wage law. Instead, overtime in Alabama is governed strictly by the federal Fair Labor Standards Act (FLSA, 29 U.S.C. § 207). Under the FLSA, covered non-exempt employees must be paid overtime at a rate of at least 1.5 times (time and a half) their regular hourly rate for all hours worked exceeding 40 hours in a designated 7-day workweek. Alabama has no daily overtime rules; working 10 or 12 hours in a single shift does not trigger overtime unless total weekly hours exceed 40. Furthermore, under the Alabama Uniform Minimum Wage and Right-to-Work Act of 2016 (Ala. Code § 25-7-41), local city and county governments are prohibited from enacting local minimum wage or overtime mandates.

In Alabama, overtime is defined strictly as any time worked beyond 40 hours in an employer's established 7-day workweek by a covered non-exempt employee under the federal FLSA (29 U.S.C. § 207). Hours worked on weekends, Saturdays, Sundays, or holidays are not legally considered overtime unless they push total weekly hours worked beyond 40. There is also no daily overtime trigger in Alabama — shifts lasting 8, 10, or 12 hours are paid at straight regular time as long as total weekly hours do not exceed 40. Only actual physical hours worked count toward overtime; paid time off (PTO), unworked holiday pay, and sick leave do not count.

Yes, Alabama taxes overtime pay as standard earned wage income for payroll withholding purposes. Alabama income tax withholding on weekly paychecks follows the Alabama Department of Revenue (ALDOR) 'Withholding Tax Tables and Instructions for Employers' (revised January 2026) formula method (Ala. Admin. Code r. 810-3-71-.02), with progressive statutory rates of 2%, 4%, and 5% applied after the withholding standard deduction, annualized federal withholding deduction, personal exemption ($1,500 Single / $3,000 Married or Head), and dependent allowances. While Alabama Act 2026-604 allows an annual individual income tax return deduction on Form 40 for up to $1,000 of the 0.5× overtime premium, payroll withholding continues on the full overtime wage. The prior temporary total overtime exemption (Act 2023-421 / Act 2024-437) expired on June 30, 2025.

Overtime pay in Alabama is at least 1.5 times (one and one-half times) your regular hourly rate for all hours worked over 40 in a workweek. For example, if your base pay is $20.00 per hour, your overtime rate is $30.00 per hour ($20.00 × 1.5). At the federal minimum wage of $7.25 per hour (which applies statewide under Ala. Code § 25-7-41), the statutory overtime floor is $10.88 per hour ($7.25 × 1.5 = $10.875 exact, rounded to $10.88 for display). For tipped employees receiving the $2.13 federal cash wage, the maximum $5.12 tip credit remains fixed, requiring employers to pay a direct cash overtime rate of at least $5.76 per hour ($10.88 − $5.12).

Overtime pay in Alabama is taxed through three primary withholding layers: federal income tax (10% to 37% progressive brackets under IRS Rev. Proc. 2025-32), FICA taxes (6.2% Social Security up to $184,500 + 1.45% Medicare, plus 0.9% additional Medicare over $200,000), and Alabama state income tax withholding (2%, 4%, and 5% progressive brackets under ALDOR formula rules). For example, a single employee earning $20.00/hr who works 45 hours earns $150.00 in overtime pay ($950.00 total gross); on their weekly paycheck, total withholdings are $184.52 ($72.08 federal, $72.68 FICA, and $39.76 Alabama state tax), leaving $765.48 in net take-home pay.

In Alabama, overtime begins once an employee works more than 40 hours in a designated 7-day workweek. Alabama law does not mandate overtime pay after 8 hours in a single workday, nor does it require overtime for working consecutive days or holidays. Only actual physical hours worked count toward the 40-hour threshold — unworked holiday pay, vacation days, and sick time are excluded from the 40-hour overtime determination.

Alabama does NOT have a full tax exemption on overtime in 2026. The previous full state income tax exemption on overtime pay under Act 2023-421 (HB 217, as amended by Act 2024-437) expired on June 30, 2025, and is no longer active. Regarding federal law, the One Big Beautiful Bill Act (OBBBA § 225) introduced a temporary federal below-the-line deduction on Schedule 1-A for the 0.5× overtime premium, but Alabama uses piecemeal conformity and did not adopt IRC § 225, yielding $0.00 in Alabama state tax savings from the federal provision. However, Alabama enacted its own separate law, Act 2026-604 (HB 527, Code of Ala. § 40-18-15(a)(29), effective tax years 2026–2028), which allows workers to deduct the qualified 0.5× overtime premium up to $1,000 per taxpayer annually on Form 40 whether or not they itemize. This return deduction is worth up to $50.00 at Alabama's 5% top tax bracket, but payroll withholding continues on all overtime hours without reduction.

Yes, salaried employees in Alabama are entitled to 1.5× overtime pay unless they meet both the federal salary threshold and the statutory duties test under FLSA 29 C.F.R. Part 541. To be classified as exempt from overtime, an employee must be paid on a guaranteed salary basis of at least $684 per week ($35,568 annually) and primarily perform executive, administrative, or professional duties. If a salaried employee earns less than the threshold, or if their daily job duties do not satisfy the legal criteria (regardless of job title), they are non-exempt and must receive overtime pay calculated by dividing their weekly salary by 40 to determine the regular hourly rate, then multiplying by 1.5 for hours worked over 40.

This calculator models the complete statutory payroll workflow in one single calculation: (1) Overtime pay is computed at 1.5× your regular rate for all weekly hours worked over 40 (FLSA 29 U.S.C. § 207); (2) Weekly gross wages are annualized (weekly gross × 52); (3) Federal income tax withholding is calculated using 2026 IRS standard deductions ($16,100 Single, $32,200 Married, $24,150 Head of Household) and Rev. Proc. 2025-32 tax brackets; (4) FICA is deducted at 6.2% Social Security (capped at $184,500) and 1.45% Medicare; (5) Alabama state withholding is determined under the official ALDOR 2026 formula method by deducting the withholding standard deduction ($2,500 phasing to $2,000 for Single), subtracting annualized federal withholding actually withheld, deducting personal exemptions ($1,500 Single / $3,000 Married) and dependent allowances, and applying statutory brackets (2% first $500, 4% next $2,500, 5% over $3,000); (6) Weekly tax components are rounded to cents; and (7) Total withholdings are subtracted from gross wages to yield your net take-home pay.

Calculations provided by this tool are high-precision withholding estimates based on the official Alabama Department of Revenue (ALDOR) 'Withholding Tax Tables and Instructions for Employers' (revised January 2026, Ala. Admin. Code r. 810-3-71-.02), IRS Rev. Proc. 2025-32, and federal FLSA regulations. Actual take-home paycheck amounts may vary slightly based on employer payroll software conventions, pre-tax elective deductions (such as 401(k), Section 125 cafeteria health plans, or HSA deferrals), additional withholding requested on Alabama Form A-4, or post-tax garnishments. These figures represent withholding calculations and do not constitute formal tax or legal advice.