•Fatigue performance was investigated for various overload levels and steel grades.•The elastic–plastic fracture mechanics approach was used in fatigue calculations.•The effect of welding residual stress was considered in fatigue calculations.•RS relaxation was used to support an understanding of the crack growth mechanics. Individual overloads (OLs) might significantly relax tensile residual stresses (RS) besides generating compressive RS in welded components and, thus, influence the fatigue performance of these components. This study seeks to investigate the effects of steel strength and OL level on the fatigue life performance of welded components. Welding calculations were first performed for different steel grades to predict welding RS (WRS). A series of numerical fatigue calculations were conducted using the elastic–plastic fracture mechanics approach based on FEM to comprehend the fatigue performance under various OL levels. The fatigue calculations were performed in the absence and presence of the WRS effect. The results showed that the higher-level OLs improved the fatigue performance of components made of higher-strength steel when the WRS effect was considered. In contrast, in the absence of the WRS effect, an improvement in fatigue performance was achieved from the higher-level OLs by lower-strength steel. Also, a remarkable RS relaxation with varying degrees was induced from the higher-level OLs for the applied steel grades. This variation in the degree of RS relaxation could be attributed to the difference in WRS distributions over the crack surface. The crack driving force and retardation effect were also used to support the study.