Managing Qualified Overtime (W-2 Box 12 Code TT)

Purpose

Under the One Big Beautiful Bill Act, employers report each employee's qualified overtime in Box 12 of the W-2 under Code TT, starting with Tax Year 2026 W-2s. (Tax Year 2025 W-2s reported it in Box 14.) Qualified overtime is the federal FLSA overtime premium: the extra half-time pay on hours worked beyond 40 in a workweek, not the full overtime wage. If you use UZIO Time Tracking, UZIO calculates this amount for each payroll. If you do not, you enter the amount on the payroll grid for each run. The Manage Qualified Overtime screen is where you review the year's amounts and import amounts for periods UZIO did not process.

When to use this screen:

• If you use UZIO Time Tracking: the premium is calculated for you on each payroll. Use this screen only if you switched to UZIO mid-year and your previous provider paid overtime, or if some overtime was tracked outside the system. Otherwise, your only task is a year-end review before W-2s are generated.
• If you do not use UZIO Time Tracking: enter each run's amount on the payroll grid (see below). Use this screen to review the year's totals, and to import amounts for periods paid by your previous provider or tracked outside the system.

Who can do this: Any user whose role includes the Payroll permission. This is usually the Employer Admin, but other admin roles can be granted the same access.

How qualified overtime is recorded

For Time Tracking clients, on every Regular and Special payroll processed on UZIO:

• The engine identifies the FLSA workweeks in the pay period and computes the overtime premium at half-time (0.5x) the regular rate on qualifying overtime hours.
• Only federal weekly overtime (over 40 hours in a workweek) qualifies. State daily overtime (California and similar) does not.
• The amount appears on the payroll grid in a Qualified OT Premium column. The matching system earning has the same name, Qualified OT Premium. It appears on the earnings grid, on the earnings import template, and in uploads. See Payroll Grid Tools.
• Amounts are published when the payroll is approved. They are reversed if UZIO voids the payroll at your request, and retracted if the run is cancelled. The tax-year total on this screen therefore reflects approved payrolls only.

If you use Time Tracking, the Qualified OT Premium column is hidden by default on the grid for Regular and Special payrolls, because UZIO fills it in for you. This includes grid layouts you saved earlier that showed the column. To check or edit the pre-filled amount before you approve the payroll, open the Columns panel at the side of the grid and tick Qualified OT Premium. The grid remembers your column choice for the next run. If you do not use Time Tracking, the Qualified OT Premium column starts blank. Enter each employee's qualified overtime premium for that run before you approve it.

When you hover over an employee's amount in the column, a tooltip says: "Used for W-2 reporting only - does not affect net pay." The amount is reported on the W-2. It does not change the employee's paycheck.

When this feature launched in August 2026, UZIO computed the amounts for all 2026 payrolls already processed for Time Tracking clients, from approved timesheets, so the year is complete from January.

The earning's W-2 Box 12 label, TT (Qualified Overtime), is selectable on the earning W-2 Box 12 label dropdown, alongside TP (Qualified Tips). See Setting Up Company Level Earnings. For the tips-side counterpart (Treasury Tipped Occupation Codes), see Understanding and Finding SOC Codes.

The Manage Qualified Overtime screen

Go to Payroll > Manage Qualified Overtime. The screen opens with a Things to note summary and a grid of every qualified-overtime record for the selected tax year, one row per employee per pay period.

• Columns: Employee ID, Employee Name, Employee Status (Active or Terminated), Period Start Date, Period End Date, Pay Date, QOT Premium (masked when your role's compensation masking applies), Source (System for an amount recorded through payroll, Imported for an upload), Uploaded By, and Uploaded Time (in your time zone). Every column is sortable.
• Filters: Tax Year, Employee Status, and Source, plus a name search.
• Download Report asks you to select the tax year first, then exports that year's imported and system-calculated amounts. The file is named <TaxYear>_QOTPremium_<timestamp>. Export keeps working for tax years where import is locked.

[Screenshot: Manage Qualified Overtime grid with the Source and QOT Premium columns; use demo data]

Importing prior-period qualified overtime

Use the Qualified OT Data Import button on the grid toolbar. In the Import Qualified Overtime modal:

1. Select the Tax Year.
2. Download the Qualified OT Template for that year. The screen says the template "pre-fills all employees paid in the current year". You enter the amounts, with Period Start Date, Period End Date, and Pay Date per row when reporting specific prior periods.
3. Browse to the completed file (.xls or .xlsx only) and click Upload.

The modal states the two ground rules: "Importing again replaces the amounts you previously imported for these employees. System-calculated amounts are never overwritten." In practice:

• Imported rows can be re-uploaded as often as you need. System rows never change through an upload.
• Re-importing the same employee and period replaces the amount you imported for it before.
• Imported amounts are added to what payroll already recorded. An upload is not rejected for a period UZIO processed, so entering such a period twice inflates the employee's total. Import only periods that did not run through UZIO payroll.

If any row fails validation, the upload is rejected with "File upload failed due to data errors" and an error log listing each failing row. The rules in summary:

• Identity. Employee ID must be present and belong to your company. Rows are matched on Employee, Period Start, Period End, and Pay Date, and that combination cannot appear twice in one file.
• Dates. The three dates must be provided together or all left blank, in valid formats, with Period End on or after Period Start, Pay Date on or after Period Start, and Pay Date inside the selected tax year.
• Amounts. Total QOT Premium must be a valid number with at most two decimals, and an employee's tax-year total can never go negative.

The rules that surprise people most are in Common problems.

Import lockout after W-2 generation

Once W-2s have been generated for a tax year, the import modal for that year shows only a lock notice:

Complete mid-year-switch imports before you generate W-2s in Year-End W-2s and Tax Documents. Viewing and exporting the year's data remain available after the lock. If a W-2 correction requires changing qualified overtime after the lock, see Still stuck?.

Common problems

Why does it say the employee's total would go negative?

Negative amounts are allowed per row, to correct an earlier import. The employee's tax-year total, imported plus payroll-calculated, must stay at or above zero. Reduce the negative adjustment and re-upload.

Why can't I import for this tax year at all?

W-2s were generated for that year. See Import lockout after W-2 generation.

The upload says my file is not the standard template

Re-download the template from the import modal for the same tax year you are uploading to. Do not add, remove, or rename columns. Templates are year-specific.

Expected outcome

• Every approved UZIO payroll's qualified overtime premium, calculated for Time Tracking clients or entered on the grid by others, accumulates under the Qualified OT Premium earning, visible per period on this screen with Source System.
• Prior-provider and outside-system overtime premium is imported per employee per period with Source Imported, re-uploadable until W-2s are generated.
• Each employee's W-2 reports the combined tax-year total in Box 12, Code TT.

Still stuck?

If a qualified-overtime amount must change after W-2s have been generated, please reach out to us at support@uzio.com or call +1-571-601-1752. Include the tax year, the employee ID, the period dates, the amount currently shown, and the amount it should be.

Related articles

• Year-End W-2s and Tax Documents
• Setting Up Company Level Earnings: the Qualified OT Premium earning and the W-2 Box 12 label dropdown
• Payroll Grid Tools: the Qualified OT Premium column on the earnings import template
• Overtime Rules Setup and Compliance Controls: how overtime hours are determined in Time Tracking
• Understanding and Finding SOC Codes: Treasury Tipped Occupation Codes (the qualified-tips counterpart, Code TP)