The One Big Beautiful Bill Act, passed on July 4, 2025, provisioned no federal withholding tax on overtime wages. Due to this act, you need to provide Overtime and Double time premiums for 2025 to employees either on the W-2 form or a statement. This applies only for the 2025 reporting year. The IRS can change reporting requirements for 2026 and later.

For questions regarding the One Big Beautiful Bill Act or IRS Guidelines, contact your tax accountant.

We’ve provided three reports that you can use to confirm the amounts for Overtime and Double time premiums for you and your employees. We've attached the three reports below.

You can also create specific formulas, which you can add to Box 14 on the W-2 Form. For questions regarding the reports or formulas, contact Sage Support.

Important Information

US Department of Labor information regarding Overtime Pay and Double time pay.

An employer who permits an employee to work overtime must typically pay the employee premium pay for the overtime work.

Employees covered by the Fair Labor Standards Act (FLSA) must receive overtime pay for hours worked more than 40 in a workweek. This overtime pay is at least 1.5 times their regular rates of pay.

The FLSA doesn’t require overtime pay for Saturdays, Sundays, holidays, or regular days of rest, unless they worked overtime hours on such days.

The FLSA, with some exceptions, requires that employer's include bonus payments as part of an employee's regular rate of pay in computing overtime.

Extra pay for working weekends or nights is a matter of agreement between the employer and the employee or their representative. The FLSA doesn’t require extra pay for weekend or night work or double time pay.

In addition, familiarize yourself with IRS notice # 2025-62 for transition penalty relief for tax year 2025 (released 11-05-2025). 

Contact your tax advisor or CPA for assistance.

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All reports and formulas listed below use the following Pay IDs:

• REG=Regular Pay id
• OT=Overtime Pay id (factor 1.5)
• DT=Doubletime Pay id (factor 2.0)

The Premium portion of Double time equals the (Double time rate*0.50)*0.50. This is due to the FLSA not recognizing Double time pay.

If you don’t use these Pay IDs, or factors, modify the reports and formulas so that they display the correct calculations.

Calculation Examples

OT Amount will be multiplied by .66667, and then subtracted from the OT amount:

$50.00*1.5=75, Formulas subtract the REG rate from the OT calculation resulting in the Premium portion of this pay of $25.00. 

DT Amount will be multiplied by 0.50, then multiplied by 0.50 again.

$50.00*2=100, It divides the amount and divides in half again. This results in the Premium portion of this pay of $25.00.

The premium portion of Double time pay won’t exceed the premium portion of Overtime pay. 

Reports

Add these reports to your menu in Payroll.

• Attachment: PayDetailByEmployeeWithOTDT1PagePerEE.rpt
• Attachment: PayDetailByEmployeeWithOTDTCalculations.rpt
• Attachment: PriorYearOTDTEmployeePayTotals.rpt

Pay Detail by Employee with OT-DT-1 Page per EE

Print this report and give it to your employee with their W-2.

• Transaction file report
• Uses the check date
• Prints one page per employee

Pay Detail by Employee with OT-DT Calculations

Provide this report to assist the employer with validating totals.

• Transaction file report
• Uses the check date
• Provides report totals 

Prior Year OT-DT Employee Pay Totals

Provide this report to assist the employer with validating totals.

• Master file report
• Retrieves prior year amounts

Formulas

Alternatively, you can add the following formulas to report Overtime and Double time premiums on Box 14 of the W-2 form for 2025.

Create the following formulas

Prior Year OT

LOOKUP(Prior Year Pay[PR Employee Pay],Employee[PR Employee],2,"OT")

PrYr OT*.66667

Prior Year OT[Public Formula]*0.66667

PrYr OT Exemption 

Prior Year OT[Public Formula]-PrYr OT*.6667[Public Formula]

Prior Year DT

LOOKUP(Prior Year Pay[PR Employee Pay],Employee[PR Employee],2,"DT")

PrYR DT Exemption

(Prior Year DT[Public Formula]*0.50)*0.50

PrYr OT Premium

PrYr DT Exemption[Public Formula]+PrYr OT Exemption[Public Formula]

Add Formula to the W-2 Form

1. Go to Payroll, Tools, Modify, W-2 Forms.
2. Select the W-2 format.
3. Click the Amounts tab.
4. Tab to Box 14.
5. Box 14 can have several lines of detail.
   1. Use the Text button to add a description to the first available blank line. For example, PrYrOT.
   2. Use the Formula button to add your formula. For example, PrYr OT Premium.
6. Click Save.

Who to contact about creating custom reports or forms

Sage Expert Services (SES)

Track overtime paid based on hours per day for W-2 reporting