How to Calculate Overtime Pay (2026 Guide)
Table of Contents
Overtime pay is extra compensation paid to eligible employees for hours worked beyond the standard 40-hour workweek, mandated by federal law at a minimum of 1.5 times their regular hourly wage.
The baseline formula to determine your overtime earnings is straightforward:
$$\text{Overtime Pay} = \text{Regular Hourly Rate} \times 1.5 \times \text{Overtime Hours Worked}$$
If you earn $20 an hour and work 45 hours in a single week, your 5 hours of overtime are calculated at $30 per hour ($20 \times 1.5$), giving you $150 in overtime pay on top of your $800 base earnings.
This comprehensive guide breaks down everything you need to accurately track your earnings this year. You will find complete time-and-a-half rate tables, vital state-by-state variations like California’s daily overtime rules, and clear answers to confusing payroll scenarios like double time and blended rates.
What Is Overtime Pay?
Overtime pay is extra compensation paid to employees for hours worked beyond the standard 40-hour workweek. Under the Fair Labor Standards Act (FLSA), the U.S. Department of Labor (DOL) requires employers to pay eligible workers at least 1.5 times their regular hourly rate for these additional hours. This is commonly referred to as “time and a half.”
The standard tracking period is a fixed, recurring workweek of 168 consecutive hours. It doesn’t matter if you work 12 hours in a single day; federally, overtime only kicks in once your total hours for that specific 7-day workweek cross the 40-hour threshold. Note that individual states, like California and Alaska, have stricter daily overtime laws that trigger after 8 hours in a single workday.
The Standard Overtime Formula
Calculating your overtime rate and total earnings for the week requires a simple two-step formula:
$$\text{Overtime Pay Rate} = \text{Regular Hourly Rate} \times 1.5$$
$$\text{Total Overtime Earnings} = \text{Overtime Pay Rate} \times \text{Overtime Hours Worked}$$
A Quick Example
Let’s say you earn a regular rate of $20 per hour and put in 45 hours during a single workweek. You have logged 5 hours of overtime.
Regular Pay: 40 hours $\times$ $20/hour = $800
Overtime Rate: $20 $\times$ 1.5 = $30 per hour
Overtime Pay: 5 hours $\times$ $30/hour = $150
Total Gross Pay: $800 + $150 = $950
While overtime is federally mandated for hours worked over 40, your actual eligibility for this extra pay depends entirely on whether your job is classified as exempt vs. non-exempt.
Exempt vs Non-Exempt Employees
Whether you are legally entitled to overtime pay depends entirely on whether you are classified as an exempt or non-exempt employee under the Fair Labor Standards Act (FLSA). Non-exempt employees must receive overtime pay for any hours worked over 40 in a workweek, while exempt employees are generally excluded from mandatory overtime protections.
A common misconception is that all salaried employees are automatically locked out of overtime. In reality, your job title or how you get paid doesn’t dictate your status—your specific job duties and earnings do. To be considered an exempt “white-collar” worker (such as an executive, administrative, or professional employee), you must meet three distinct tests established by the U.S. Department of Labor (DOL).
The Salary Basis Test: You must be paid a fixed salary that does not fluctuate based on the quality or quantity of the work you perform.
The Salary Level Test: You must earn at least the federal baseline threshold. Following a series of legal shifts and a formal Department of Labor rollback, the standard federal salary threshold is $684 per week, which equates to $35,568 annually. If you earn less than this, you are automatically non-exempt and eligible for overtime, regardless of your role.
The Job Duties Test: Your actual day-to-day job responsibilities must primarily involve high-level tasks, such as managing a department, directing at least two employees, or executing specialized professional operations requiring advanced degrees.
State Law Alert: Many states have much stricter guidelines than the federal government. For example, if you live in California, New York, or Washington, the state-level minimum salary threshold to be considered exempt is significantly higher than the federal baseline. Employers must follow whichever law provides the greater benefit to the worker.
To see how standard positions are typically classified under federal regulations, review the overview below:
| Job Type | FLSA Classification | Overtime Eligible? |
|---|---|---|
| Hourly Workers (e.g., Retail, Construction, Hospitality) | Non-Exempt | Yes, always entitled to 1.5x pay after 40 hours. |
| Salaried, Under Threshold (Earns less than $35,568/yr) | Non-Exempt | Yes, regardless of job title or professional duties. |
| Executive/Managers (Manages team, has hire/fire power) | Exempt | No, if salary is at least $35,568/yr. |
| Administrative Roles (Exercises independent judgment) | Exempt | No, if salary is at least $35,568/yr. |
| Learned Professionals (e.g., Engineers, Lawyers, CPAs) | Exempt | No, if salary is at least $35,568/yr. |
Hourly Workers (e.g., Retail, Hospitality)
FLSA: Non-Exempt
Overtime: Yes, always entitled to 1.5x pay after 40 hours.
Salaried, Under Threshold (< $35,568/yr)
FLSA: Non-Exempt
Overtime: Yes, regardless of job title or duties.
Executive/Managers
FLSA: Exempt
Overtime: No, if salary is at least $35,568/yr.
Administrative Roles
FLSA: Exempt
Overtime: No, if salary is at least $35,568/yr.
Learned Professionals (Engineers, CPAs)
FLSA: Exempt
Overtime: No, if salary is at least $35,568/yr.
Overtime Rate Formula: How to Calculate Your Time-and-a-Half Pay
Your overtime rate is exactly 1.5 times your regular hourly wage. Under the Fair Labor Standards Act (FLSA), this is the standard “time-and-a-half” multiplier that most non-exempt employees in the U.S. receive for any hours worked over 40 in a single workweek.
To find your specific overtime rate, you can use this straightforward formula:
$$\text{Regular Hourly Rate} \times 1.5 = \text{Overtime Hourly Rate}$$
Quick Reference Overtime Rate Table
Instead of pulling out a calculator every time, you can use the lookup table below to find your exact overtime pay rate. This covers standard hourly wages from $10 up to $50 per hour.
| Regular Hourly Rate | Overtime Rate (Time-and-a-Half) |
| $10.00 | $15.00 |
| $12.00 | $18.00 |
| $15.00 | $22.50 |
| $18.00 | $27.00 |
| $20.00 | $30.00 |
| $22.00 | $33.00 |
| $25.00 | $37.50 |
| $28.00 | $42.00 |
| $30.00 | $45.00 |
| $32.00 | $48.00 |
| $35.00 | $52.50 |
| $38.00 | $57.00 |
| $40.00 | $60.00 |
| $42.00 | $63.00 |
| $45.00 | $67.50 |
| $48.00 | $72.00 |
| $50.00 | $75.00 |
Real-World Calculation Example
Let’s look at how this plays out on your actual paycheck if you work a standard retail or manufacturing shift.
If you earn $22.00 an hour and work 45 hours in a single week, your regular pay covers the first 40 hours. The remaining 5 hours qualify for the overtime rate.
Step 1: Calculate your overtime rate.
$$22.00 \times 1.5 = 33.00$$Your overtime rate is $33.00 per hour.
Step 2: Calculate your regular earnings.
$$40 \text{ hours} \times 22.00 = 880.00$$Step 3: Calculate your overtime earnings.
$$5 \text{ hours} \times 33.00 = 165.00$$Step 4: Add them together for your gross pay.
$$880.00 + 165.00 = 1045.00$$Your total gross pay for that week before taxes is $1,045.00.
Payroll departments frequently see errors here when workers assume bonuses or shift differentials don’t count toward this calculation. Under Department of Labor rules, nondiscretionary bonuses must actually be baked into that base regular rate before multiplying by 1.5.
Overtime Premium Pay Double Time and Daily vs Weekly Overtime
Overtime Premium Pay
Premium pay is the extra half you receive above your regular rate. Standard overtime is 1.5x, so the premium is 0.5x.
Formula: Hourly rate x 0.5 x Overtime hours = Premium pay
Example: Hourly rate $20, overtime hours 10, premium pay = $20 x 0.5 x 10 = $100
Double Time 2x Pay
Double time means 2 times your regular rate. Federal law does not mandate this. Some states do.
When double time applies:
California: Over 12 hours in a day, or over 8 hours on 7th consecutive day
Some union contracts or company policies
Example: Regular rate $20, double time rate $40. If you work 14 hours in one day: first 8 hours regular, next 4 hours overtime 1.5x, last 2 hours double time 2x.
Daily vs Weekly Overtime
Federal law uses weekly overtime: overtime for hours over 40 in a workweek.
Some states use daily overtime:
California: Overtime for hours over 8 in a day, double time for hours over 12
Colorado: Overtime for hours over 12 in a day
Nevada: Overtime for hours over 8 in a day for certain workers
If your state has daily overtime, you may qualify for overtime even if you did not work 40 hours in the week.
Calculating Overtime — Salaried Employees
Salaried employees are eligible for overtime pay unless they meet specific federal and state criteria to be classified as exempt. Under the Fair Labor Standards Act (FLSA), paying an employee a fixed salary does not automatically strip them of overtime rights; if they are non-exempt, they must receive time-and-a-half for all hours worked over 40 in a single workweek.
Many employees and payroll teams mistakenly assume salaried workers never get overtime, leading to costly wage-and-hour violations. To calculate overtime for a non-exempt salaried employee, you must first break down their salary into an implied regular hourly rate.
Non-Exempt Salary Formula
For salaried employees who work a standard, predictable schedule (typically 40 hours per week), calculating overtime requires converting their weekly salary equivalent into a regular hourly rate.
The standard process uses these two equations:
Payroll Note: If an employee’s salary covers a fixed schedule of fewer than 40 hours (such as 35 hours), they are paid at their regular rate for hours 36 through 40. True FLSA time-and-a-half overtime only kicks in after exceeding 40 physical hours worked in the designated 168-hour workweek.
Example Calculation: An administrative assistant earns a fixed salary of $800 per week based on a standard 40-hour workweek. During a busy shipping week, they work 46 hours.
Find the regular rate:
Find the overtime rate:
Calculate overtime earnings:
Calculate total weekly pay:
Monthly Salary Formula
When an employee is paid a fixed monthly or semi-monthly salary, you cannot simply divide their paycheck by the hours in that specific month, because the number of days fluctuates. Instead, you must annualize the salary first to establish an accurate weekly baseline.
Follow these steps to find the regular rate and calculate overtime for a monthly salaried worker:
Annualize the salary:
Find the weekly equivalent:
Determine the regular hourly rate:
Calculate the overtime pay:
Example Calculation: A non-exempt desk coordinator receives a flat monthly salary of $3,466.67. In one specific workweek, they clock 45 hours on their timesheet.
Annual Salary:
Weekly Salary Equivalent:
Regular Hourly Rate:
Overtime Premium Rate:
Overtime Wages Earned:
For this specific week, the employee’s total gross earnings would be their regular weekly allocation of $800.00 plus the $150.00 of overtime pay. If you want to skip doing this math by hand every pay period, you can easily plug your salary numbers directly into our : free paycheck calculator → /calculators/overtime-calculator/] to see your estimated take-home pay instantly.
Overtime for Part-Time Employees
Under federal law, part-time employees are absolutely entitled to overtime pay if they work more than 40 hours in a single workweek. The Fair Labor Standards Act (FLSA) does not distinguish between full-time and part-time status when it comes to overtime eligibility.
Many hourly workers mistakenly believe that because their standard schedule is 20 or 30 hours a week, they cannot earn “time and a half.” In reality, the U.S. Department of Labor only looks at the total hours logged during a fixed, seven-day workweek. If your hours cross the 40-hour threshold, your employer must pay you the premium rate for every additional hour, regardless of your official job designation.
How Part-Time Overtime Works in Practice
If you normally work a part-time schedule but cover extra shifts due to seasonal rushes or a coworker calling in sick, your pay stub should reflect an overtime premium for any hours over 40. Keep in mind that hours worked between your normal part-time schedule and 40 hours are paid at your regular hourly rate (often called “straight time”). The overtime rate only kicks in after hour 40.
Important State Exception: If you work in a state with daily overtime limits—such as California, Nevada, or Alaska—you might qualify for overtime even if your weekly total is under 40 hours. For example, if you work a single 10-hour shift in California, you are owed 2 hours of overtime pay for that day, even if you only work 15 hours total that week.
Numerical Example: The Part-Time Extra Shift
Let’s look at a typical scenario for an hourly retail worker to see how this plays out mathematically.
Regular Hourly Rate: $16.00 per hour
Standard Schedule: 25 hours per week
Hours Worked This Week: 43 hours (due to covering extra shifts)
Because this worker exceeded the 40-hour federal limit, their hours must be split into 40 regular hours and 3 overtime hours.
$$\text{Overtime Pay Rate} = \$16.00 \times 1.5 = \$24.00 \text{ per hour}$$
$$\text{Regular Pay} = 40 \text{ hours} \times \$16.00 = \$640.00$$
$$\text{Overtime Pay} = 3 \text{ hours} \times \$24.00 = \$72.00$$
$$\text{Total Gross Wages} = \$640.00 + \$72.00 = \$712.00$$
Overtime, Bonuses & Holiday Pay — What's the Difference?
While overtime, bonuses, and holiday pay all put extra cash in your pocket, the IRS treats them differently when it comes to withholding. Overtime pay is directly tied to the extra hours you work and is taxed as regular gross wages. Bonuses and holiday pay, however, are often classified as supplemental wages, which employers frequently tax at a flat federal withholding rate of 22%—often leading to a surprise on your pay stub. If you notice a chunk of your extra earnings missing, it’s usually due to this specific withholding rule rather than a change in your actual tax bracket. To understand how these different types of earnings impact your overall tax liability, read our deep dive on [LINK: why you might owe taxes even with a lower annual income → /blog/why-do-i-owe-taxes/].
How Overtime Affects Gross & Take-Home Pay
Your gross pay is the total amount of money you earn before any taxes or deductions are taken out. When you work overtime, those hours are calculated at your premium rate (usually 1.5 times your regular hourly rate) and added directly to your standard earnings for the pay period.
$$\text{Gross Pay} = (\text{Regular Hours} \times \text{Regular Rate}) + (\text{Overtime Hours} \times \text{Overtime Rate})$$
For example, if you earn $20 an hour and work 45 hours in a single week, your overtime rate is $30 an hour ($20 \times 1.5$). Your gross pay calculation looks like this:
Regular Pay: 40 hours $\times$ $20 = $800
Overtime Pay: 5 hours $\times$ $30 = $150
Total Gross Pay: $800 + $150 = $950
Take-home pay (or net pay) is what is left after federal income tax, state tax, local tax, and FICA (Social Security and Medicare) are subtracted from that $950 gross total. To see your exact net pay after federal tax, state tax, and FICA, use our free: Paycheck Calculator → /calculators/paycheck-calculator/ or Overtime Calculator
Overtime and 401(k) / Retirement Contributions
If you participate in a workplace 401(k) plan and your contributions are set as a percentage of your salary, your overtime earnings will almost always increase your retirement savings automatically. The Fair Labor Standards Act (FLSA) requires overtime to be included in your gross wages, and most standard employer retirement plans calculate your percentage-based deduction from that total gross amount.
For instance, if you contribute 6% of your pay to a pre-tax 401(k), a regular weekly paycheck of $800 results in a $48 retirement contribution. If you pick up overtime shifts and your gross pay bumps up to $1,100 for the week, your 401(k) contribution automatically increases to $66. This is an easy way to accelerate your retirement savings, though it does mean your take-home pay will reflect that larger retirement deduction alongside the increased tax withholding.
Common Mistakes When Calculating Overtime
Even seasoned payroll departments occasionally slip up when calculating overtime, and it is incredibly easy for hourly employees to misread their stubs. Here are five of the most common mistakes to watch out for to ensure you are getting paid every dollar you earned:
Averaging hours over a biweekly pay period: The FLSA dictates that a workweek is a fixed, recurring period of 168 hours (7 consecutive days). Employers cannot average 50 hours in week one and 30 hours in week two to avoid paying 10 hours of overtime, even if you get paid biweekly.
Forgetting to include non-discretionary bonuses in the regular rate: If you earn performance bonuses, production incentives, or piece-rate supplements, that extra cash must be factored into your regular hourly rate before your 1.5x overtime multiplier is calculated.
Misclassifying employees as “exempt” based solely on job title: Just because an employer pays you a salary or calls you a “manager” does not automatically exempt you from overtime. You must meet specific salary thresholds and job duty tests defined by the U.S. Department of Labor to be legally excluded from overtime pay.
Failing to track “off-the-clock” prep work: Time spent logging into computer systems, putting on mandatory safety gear, or attending mandatory pre-shift meetings counts as compensable hours. If these activities push your total time over 40 hours for the week, they must be compensated at the overtime rate.
Confusing daily overtime rules with federal weekly rules: Federal law only requires overtime after 40 hours worked in a single workweek. While states like California and Alaska require overtime after 8 hours of work in a single day, assuming daily overtime applies nationwide is a frequent point of confusion for remote or relocating workers.
Frequently Asked Questions and Related Tools
Hourly rate x 1.5 x overtime hours = overtime pay
$15 x 1.5 = $22.50 overtime rate. Multiply by overtime hours.
$22.50 x 1.5 = $33.75 per overtime hour.
Multiply your regular hourly rate by 1.5.
$17 x 1.5 = $25.50 per overtime hour.
$23.50 x 1.5 = $35.25 per overtime hour.
Standard is 1.5x. Double time 2x applies in some states like California.
Salaried employees earning less than $35,568 per year qualify for overtime. Exempt roles do not.
Overtime is taxed as regular income. Use a paycheck calculator to see net pay.
Regular pay + overtime pay = gross pay.
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