Navigating the “No Tax on Overtime” Rule: What Payroll Professionals Must Know

On July 4, 2025, the “One Big Beautiful Bill Act” (OBBBA) was signed into law, introducing the most significant tax break on employee wages in decades. Central to this legislation is the groundbreaking “No Tax on Overtime” provision, which allows eligible employees to deduct up to $12,500 of qualifying overtime pay from their federal taxable income. This webinar will provide payroll professionals with a comprehensive breakdown of the new tax treatment and what it means for payroll operations going forward.

Designed specifically for payroll processors and service providers, this session delivers everything needed to implement the OBBBA changes with confidence. From defining eligibility and navigating income phase-out thresholds to updating payroll systems and ensuring proper W-2 reporting, every aspect of the law will be covered. Attendees will also gain insight into developing employee education strategies to help workers maximize their tax savings and avoid filing errors. Whether you're managing in-house payroll or advising clients, this timely session will prepare you to handle the transition smoothly and compliantly.

Learning Objectives:

This course defines the hours, payments, and issues that are considered in calculating overtime pay, and Specific items that are covered include:

Which hours worked qualify as overtime and as paid wages, and which don't (Hint: OT is not just earned after 40 hours in a workweek, in some states, OT is due when the individual works over 8 hourrs in a day)
Which hours qualify for overtime premiums, and which don't.
What fringe benefits and supplemental payments should be counted toward the hourly rate of pay?
Are there any restrictions on setting work weeks?
What does the OBBB mean for payroll deductions and reporting?
How do you account for shift differentials, when an employee's workweek changes, etc?
Do payments made after a regular pay day need to be applied to weeks wherein overtime was worked?
What states have overtime rules that are different than the minimums set by the Fair Labor Standards Act.
What the Texas Federal Court's overturning of the salary requirements means for employers who updated them in 2024.

Information covered in the presentation:

Understand the federal tax deduction for overtime pay, including who qualifies and how it is applied.
Identify income phase-out rules and wage thresholds that impact eligibility.
Learn how this provision interacts with Social Security, Medicare, and applicable state taxes.
Get step-by-step guidance on updating payroll systems and processes for compliance.
Ensure accurate year-end reporting by mastering the new W-2 requirements.
Build a clear communication plan to educate employees and leadership on the new benefit.

Who Will Benefit:

HR Managers
Payroll Managers
Budget Personnel
HR and Payroll Compliance Managers
Department Managers
Fringe Benefit and Travel Staff

Attend this webinar to learn what the new rules and amounts are, as well as other information from the new rules.

HRCI Credits | SHRM Credits

HRCI : 1.0 | SHRM : 1.0

HRCI Credits: 1.0

SHRM Credits: 1.0

Pioneer Educator is recognized by SHRM to offer Professional Development Credits (PDCs) for the SHRM-CPSM or SHRM-SCPSM. This program is valid for 1.0 PDCs for the SHRM-CPSM or SHRM-SCPSM. For more information about certification or recertification, please portal.shrm.org.

HR Certification Institute’s® (https://www.hrci.org) official seal confirms that Pioneer Educator meets the criteria for pre-approved recertification credit(s) for any of HRCI’s eight credentials, including SPHR® and PHR®.

This Program, has been approved for 1.0 HR (General) recertification credit hours toward aPHR®, aPHRi™, PHR®, PHRca®, SPHR®, GPHR®, PHRi™ and SPHRi™recertification through HR Certification Institute® (HRCI®).

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