Tie-out tool / How to calculate Code TT

How to calculate W-2 box 12 code TT

For each workweek, multiply the hours worked over 40 by half the regular rate. Add the weeks that were paid in 2026. That total goes in box 12 with code TT.

Code TT for a workweek = hours worked over 40 x one-half x the regular rate. For someone paid only one hourly rate, the regular rate is that hourly rate. (IRS FS-2026-13, Q12; 29 CFR 778.110(a))

Steps

Fix the workweek. A workweek is a fixed, recurring 168-hour period. It can start on any day, and it does not change with the pay period. (29 CFR 778.105)
Count hours worked in each workweek. Leave out holiday, vacation and sick hours that were paid but not worked. (29 CFR 778.218)
Take the hours over 40. Each workweek stands alone; do not average two weeks. (29 CFR 778.104)
Multiply by half the regular rate. One hourly rate and nothing else: the regular rate is that rate. (29 CFR 778.110(a))
Keep the weeks paid in 2026. Qualified overtime follows the same timing as wages for withholding: the year it is paid. (FS-2026-13, Q3)

Worked example

The Department of Labor's own example: $12 an hour, 46 hours worked. Pay is 46 x $12 plus 6 x $6 = $588. The 6 x $6 = $36 is the half-time premium, and that is the Code TT amount for the week. (29 CFR 778.110(a))

When this simple method is not enough

A bonus or commission raises the regular rate.
A salaried nonexempt employee has a regular rate that comes from the salary.
Two hourly rates in one week need a weighted average. (29 CFR 778.115)
Hospital 8-and-80 plans, fire and police work periods and comp time follow other parts of section 7. (FS-2026-13, Q17)

Do the whole year from a file

Drop a timesheet CSV, paste the register overtime totals, and get a worksheet per employee with the reason for every difference.

Open the tie-out tool

Runs in your browser. Payroll data is never uploaded.

Questions

Is the full overtime pay reported in box 12 code TT?

No. Only the amount above the regular rate. With time-and-a-half, that is the half.

Is Code TT limited to $12,500?

No. The employer reports the full qualified overtime paid. The $12,500 limit ($25,000 on a joint return) applies on the employee tax return. FS-2026-13, Q10 gives an example of $30,000 reported in full.

Sources

Fetched 2026-11-10. Regulation text was checked against the federal annual edition; links open the current online version.

Updated 2026-11-10. Tickfoot is an information tool, not tax, legal or professional advice.