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01/13/2026

Auto-Calculated Overtime Premium

Payroll Clients Can Now Add Calculations to Box 14 for 2025 W-2s
Table of Content

This update applies to Greenshades Payroll clients preparing 2025 W-2s. 

If you use Greenshades Year-End Forms only (YEF) or another product without payroll, skip ahead to the “Options for Non-Payroll/YEF-Only Clients” section below. 

What’s New

Greenshades Payroll has released a new enhancement that automatically calculates the FLSA overtime premium and places it in Box 14 of the Form W-2 during the 2025 W-2 creation process. 

This supports the IRS’s transitional guidance for tax year 2025, where employees may need access to their qualified overtime premium to claim the new above-the-line deduction. 

How it Works 

When creating 2025 W-2s, the overtime premium is now calculated and handled automatically: 

  1. Navigate to Payroll > Tax Generation > W-2 
  2. Select Tax Year 2025 
  3. Click Run Report 

You’ll now see a Box 14 entry labeled “OT PREM”, which represents the total qualified overtime premium for the year. 

Additional details: 

  • By downloading the W-2 Detail Report, you can view the overtime premium amount by employee 
  • Once you create W-2 forms, the overtime premium is automatically populated in Box 14 for each employee who had qualifying overtime during the year 
  • You can download, review, and edit the data before final submission
  • The amount is informational only and does not change taxable wages or withholding 

This removes the need for manual premium calculations or spreadsheets during year-end. Employees use the information provided to determine eligibility on their individual tax returns. 

Why this Matters

Under IRS guidance, only the FLSA overtime premium portion (generally the extra 0.5× paid on hours worked over 40 in a workweek) qualifies for the 2025 overtime deduction. 

That distinction has created extra work for payroll teams. This update helps by: 

  • Automatically identifying and calculating the premium portion 
  • Providing a clean, consistent value employees can reference 
  • Supporting optional Box 14 reporting for 2025 
  • Preparing payroll processes for mandatory overtime reporting beginning in 2026 

Options for Non-Payroll/YEF-Only Clients

If you use Greenshades Year-End Forms or another product without payroll, the overtime premium is not auto-calculated. However, you still have supported options for 2025: 

  • Calculate the qualified overtime premium externally using your payroll system or reports 
  • Upload the premium amount into Year-End Forms using the standard import templates 
  • Manually enter or batch-edit Box 14 values once data is in the system 
  • Choose how to present the information: 
    • Box 14 of the W-2 (recommended for 2025), or 
    • A separate year-end statement for employees 

This mirrors current workflows while allowing flexibility during the 2025 transition year. 

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