Regular Rate Audit

W-2 Box 12 Code TT Calculator: Qualified Overtime Compensation

Enter one workweek. The calculator computes the FLSA regular rate, the 0.5× premium that belongs in Box 12 code TT for tax year 2026 — and the gap versus what a bonus-blind payroll system reports. Runs entirely in your browser; nothing you enter is stored or sent anywhere.

Includable pay this week
base wages + bonus + differential—
Regular rate this week (vs. base rate)—
FLSA overtime hours (over 40)—
✓ Correct code TT amount, this week
0.5 × regular rate × FLSA OT hours—
What a bonus-blind system reports
= the "÷3" estimate of the paystub OT line—
Reporting error — and unpaid overtime—

This is one employee, one week.

The free exposure snapshot runs the same computation on every employee, every workweek, from your actual payroll register and time data — and ranks the gap by pay code. It's the analysis a litigation economist would run after a lawsuit, done from your own exports first.

Worked example (verifiable by hand)

$20.00/hr, 50 hours, $200 nondiscretionary attendance bonus. Includable pay = 50 × $20 + $200 = $1,200. Regular rate = $1,200 ÷ 50 = $24.00 (29 CFR 778.110(b)). Code TT premium = 0.5 × $24.00 × 10 OT hours = $120.00. A system computing on the $20 base reports $100.00 — a $20.00 understatement that is simultaneously a W-2 reporting error and unpaid overtime (IRS Notice 2025-69 method (E) describes exactly this underestimate).

Code TT: quick answers

What is W-2 Box 12 code TT? Code TT is the W-2 Box 12 code, mandatory starting tax year 2026, where employers report qualified overtime compensation: the premium ("half") portion of FLSA-required time-and-a-half, per the 2026 IRS General Instructions for Forms W-2 and W-3.

Is qualified overtime compensation the same as total overtime pay? No. Only the 0.5× premium of overtime required by the FLSA (hours over 40 per workweek) counts. The straight-time portion, state-law-only overtime such as California daily overtime in a sub-40-hour week, the extra half of California double time, and contractual overtime are excluded.

Why is dividing total overtime pay by 3 not reliable? The divide-by-3 method in IRS Notice 2025-69 was employee-side guidance for tax year 2025 only, and the Notice itself states the method underestimates qualified overtime compensation when a nondiscretionary bonus increases the regular rate. The premium must be computed on the regular rate, which includes nondiscretionary bonuses and shift differentials.

Do bonuses change the overtime premium? Yes. Nondiscretionary bonuses must be included in the regular rate before the premium is computed (29 CFR 778.110(b)). An employee at $20/hour working 50 hours with a $200 attendance bonus has a $24.00 regular rate, so the week's premium is $120.00, not $100.00.

Deeper answers — exclusions, penalties, the retroactive-bonus trap — are in the guide's full FAQ.

This tool is a single-week, federal-only view. A full regular rate of pay calculator — federal + California modes, with Alvarado flat-sum divisors and Ferra premiums — is in progress; watch the learn hub.

Educational tool — not legal or tax advice. Methodology & sources: 2026 W-2/W-3 instructions · IRS Notice 2025-69 · 29 CFR 778.110 · DOL Fact Sheet #56A · full walkthrough in the employer's guide to code TT. Multiple pay rates, retroactive bonuses, or semi-monthly periods? That's the complexity the snapshot handles.