OBBBA’s Tax Provisions for Overtime and Tips
We’ve received questions both from our client employers and their employees regarding how the changes brought about by the One Big Beautiful Bill Act (OBBBA) will impact their pay moving forward. As with many new laws affecting the workplace, there’s been some degree of overthinking how this will work. The abridged version is that nothing is changing about how employees are paid and the taxes withheld on their paychecks. The tax relief will come when they file their 2025 return early next year. Customer-paid tips and the “half” portion of “time and a half” on overtime income will be excluded from their tax liability, up to a certain dollar amount. We’ve put together this guide to help all of our employers relay this information to their employees.
The guide encompasses virtually everything the SuretyHR currently understands about how this will impact employers and employees. Any additional questions should be directed to your tax expert. We expect additional information to become available later in 2025, and will share that with our clients as soon as we are able.
