Hospital overtime, step by step
The calculator opens with a nurse on the hospital 8-and-80 schedule: 300 overtime hours in the year (hours over 8 in a day or over 80 in the 14-day period) at a regular rate of $46, paid at time and a half. That is $20,700 of overtime pay; the deductible half is $6,900. With $98,000 of MAGI there is no phase-out, so the full $6,900 is the deduction.
Under section 7(j) of the FLSA, hospitals and residential care facilities can use a fixed 14-day period instead of the workweek, if they agree it with employees before the work is done. Overtime is then due for hours over 8 in a day and over 80 in the period, and daily overtime already paid counts toward the 80-hour overtime, so the same hour isn’t paid twice. Count each overtime hour once when you enter the year’s total.
Use your real regular rate
The FLSA regular rate isn’t just the base hourly wage. The Department of Labor’s healthcare fact sheet says shift differentials (nights, weekends) must be included, and so must non-discretionary bonuses. If most of your overtime falls on night shifts with a differential, your regular rate for those hours is higher, and so is the half you can deduct. Your 2026 W-2 does this maths for you: box 12, code TT is the qualified amount; choose The premium and enter it.
Who is covered
- Hourly RNs should receive overtime pay, says the Department of Labor, so their FLSA overtime qualifies.
- LPNs generally don’t qualify for the professional exemption, so their FLSA overtime qualifies too.
- Salaried RNs who meet the learned-professional duties test and earn at least $684 a week can be exempt (the salary level in the Department of Labor’s Fact Sheet #17N, as of October 2026). An exempt nurse’s extra-shift pay isn’t FLSA overtime and doesn’t count, even if the hospital pays it at time and a half.
Not sure? The IRS suggests asking your employer whether you are an FLSA non-exempt employee. Untick the FLSA box above to see the result if you’re exempt.