A good oversized T-shirt should look intentionally roomy rather than accidentally too big. The shoulder, sleeve and body are all allowed extra space, but the proportions still need to feel balanced on you.
The shoulder should sit lower
A dropped shoulder is one of the clearest signs of an oversized cut. Instead of the seam sitting exactly at the edge of your shoulder, it falls slightly down the upper arm. That creates the relaxed silhouette without needing to size up several times.
The body should have visible ease
You should be able to see space between your body and the fabric through the chest and waist. If the T-shirt is pulling across the torso, it is not really fitting oversized. If it is so wide that the shape collapses completely, you may prefer a smaller size.
Sleeves are usually longer and wider
Oversized sleeves often finish lower on the upper arm than a regular tee. That extra width is part of the silhouette. The useful test is whether the sleeve still hangs cleanly instead of bunching awkwardly.
Check the hem length
An oversized tee is often longer through the body, but length changes how you can style it. A longer hem works well loose over leggings or tucked into trousers. If you want to wear it with skirts or high-waisted denim, make sure there is enough flexibility to tuck or fold without excessive bulk.
Should you size up?
If a garment is already designed as oversized, your usual size should normally give you the intended relaxed fit. Size up when you specifically want more volume and length, not because the word oversized automatically means you need a bigger size.