Is code TT just the total overtime pay?

No — and this is the error that costs the most to unwind. Box 12 code TT carries the compensation exceeding the regular rate: the half in time-and-a-half, not the whole overtime line. On a register paying $30 an hour with ten overtime hours, code TT is the $150 premium, not the $450 gross. Reporting the total overstates the figure roughly threefold.

Isn't the regular rate the base hourly rate?

Only when nothing else was paid. Non-discretionary bonuses, shift differentials and commissions fold into the regular rate under FLSA section 7, which raises the premium owed. A register that paid overtime at 1.5× base while a production bonus was running has underpaid — a wage-and-hour exposure sitting underneath the reporting one.

Didn't our payroll platform already fix this?

Going forward, yes. The major platforms added the qualified overtime and tip fields in late 2025 and early 2026, so payroll run from that point separates cleanly. None of them go back and reclassify the months already run — those periods were recorded without the split, and rebuilding them is a reconstruction off the register rather than a setting.

Who signs the workpaper?

Your preparer does. Truing produces the computation, the per-employee workbook and a method memo setting out every rule applied and the primary source behind it, so the person whose name goes on the return can review the method and stand behind it. We do not file, and we are not your preparer of record.

What if the register can't support an employee?

Then that employee is named, not estimated. Every engagement ships an exceptions report listing each employee the data cannot carry and the specific reason — a missing hours column, tips not split from mandatory service charges, an occupation with no Treasury code. If more than a fifth of the book lands there we stop and ask for a better export, rather than deliver a workbook that is mostly gaps.

Code TT is the overtime premium, not total overtime pay

Almost every explanation of the new Box 12 codes says 'report qualified overtime'. It does not say which number that is — and the intuitive answer is the wrong one.

Last verified July 28, 2026

New Box 12 codesTT — total qualified overtime compensation · TP — total cash tips reported to the employerIRS

First applies toTax year 2026 — W-2s issued early 2027IRS

What TT carriesCompensation exceeding the regular rate — the half in time-and-a-halfDOL

Getting it wrongInformation-reporting penalties under IRC §6721 and §6722IRS

The 2026 Form W-2 adds two Box 12 codes: TT for the total amount of qualified overtime compensation, and TP for the total amount of cash tips reported to the employer. They first apply to tax year 2026, on the W-2s issued in early 2027, and are due to the SSA and to employees by 1 February 2027.

The two codes are not symmetrical, and the asymmetry matters. Code TT carries a figure the employer has to derive — qualified overtime. Code TP carries cash tips as already reported, which is not the same thing as the employee’s qualified tips. That distinction is worked through in the companion guide on code TP.

Neither code changes withholding. FICA, federal income tax and state income tax are computed exactly as they were in 2025. These are informational figures the employee uses to claim a deduction on their own return — which is precisely why they are easy to get wrong without anything upstream breaking to warn you.

The number code TT wants

Code TT carries the premium portion of overtime — the compensation paid in excess of the employee’s regular rate. On classic time-and-a-half, that is the half. It is not the total overtime pay, and it is not the hours multiplied by the overtime rate.

Concretely, for an employee at a $20 regular rate working 10 overtime hours:

Figure	Amount	Goes in Box 12 code TT?
Overtime hours paid at $30	$300	No — this is total overtime pay
Straight-time component ($20 × 10)	$200	No
Premium above the regular rate ($10 × 10)	$100	Yes

Reporting $300 where $100 belongs overstates the employee’s deduction threefold. It is the error that costs the most to unwind, because it is discovered on the employee’s return rather than in your payroll system.

The regular rate is usually not the base hourly rate

This is the second trap, and it compounds the first. Under FLSA section 7, the regular rate includes more than base pay: non-discretionary bonuses, shift differentials and commissions all fold into it. Every one of those raises the regular rate, which raises the premium the employee actually earned.

So an employer who correctly reports “the half” but computes it off base hourly pay still understates code TT for anyone who received a production bonus or a night differential. The two errors point in opposite directions, which is why a total that looks plausible in aggregate can be wrong for most individuals in the file.

What your payroll register has to contain

The requirement is a year-long tracking obligation, not a year-end calculation. To derive code TT per employee you need, per pay period:

Overtime hours, separated from straight-time hours.
The regular rate as actually computed for that period — including anything that folded into it, not the stored base rate.
Every non-discretionary bonus, differential and commission, attributed to its period.
Enough identity to attribute all of it to one employee across the whole year.

Many registers do not separate the premium at all, because until 2026 nothing required them to. That is not a payroll platform failing — it is a schema that predates the requirement. The figures are still recoverable from what the register does hold, but the derivation has to be reconstructed and shown.

Why “our payroll platform handles it” is worth checking

Platforms have added the fields. Whether a given platform back-computed the premium correctly for periods already run in 2026 — with bonuses folded into the regular rate — is a different question, and it is answerable now rather than in January.

Penalties for incorrect or missing Box 12 figures fall under the general information-reporting provisions, IRC §6721 and §6722, which are assessed per return. On a workforce of any size the exposure is a function of headcount, not of how wrong any single figure is.

Checking your own register

The free readiness check reads a payroll register export and counts how many of your employees can be classified from the data you already have — before anything is bought, and while there is still time to pull a better export. The register is read in the request and not stored.

Where the data supports it, the reconstruction returns a per-employee workbook showing the derivation for every figure, a W-2 import file, and a method memo. Pricing is $350 minimum, then $8 per employee. The reconstruction is only one of three costs attached to a wrong code TT figure — the published per-return penalty amounts and the W-2c correction are set out in what it costs to fix Box 12 code TT. Truing is also not the only place to have it done — the four options, and what each publishes, covers your payroll provider, the national tax firms and your accountant.

Figures and citations verified against the IRS General Instructions for Forms W-2 and W-3 and DOL sources on 28 July 2026. Nothing here is tax advice.