To calculate overtime pay, multiply your regular hourly rate by 1.5, then multiply that overtime rate by the number of overtime hours you worked. Under US federal law, overtime applies to hours worked beyond 40 in a workweek for most hourly employees. So a worker earning $20 an hour is paid $30 for each overtime hour. You can run your own numbers in the time and a half calculator, but the steps below show exactly how the figure is built.
How do you calculate overtime pay?
Overtime is paid at a premium rate, so the calculation has two parts: your normal pay and your overtime pay. Here is the method:
- Find your regular hourly rate. This is your normal pay per hour before any premium.
- Multiply it by 1.5 to get the overtime ("time and a half") rate.
- Multiply the overtime rate by your overtime hours to get overtime pay.
- Add your regular pay (hourly rate times normal hours) to get total pay.
For example, at $20 an hour with 40 regular hours and 10 overtime hours, your overtime rate is $30. Overtime pay is $30 times 10, or $300. Add $800 of regular pay and the total is $1,100 for the week.
What is the overtime rate?
The standard US overtime rate is 1.5 times your regular rate, which is where the phrase "time and a half" comes from. The table below shows the overtime rate at several common hourly wages.
| Regular rate | Overtime rate (1.5x) | Pay for 10 OT hours |
|---|---|---|
| $15.00 | $22.50 | $225.00 |
| $20.00 | $30.00 | $300.00 |
| $25.00 | $37.50 | $375.00 |
| $30.00 | $45.00 | $450.00 |
| $40.00 | $60.00 | $600.00 |
Some situations pay double time, or twice the regular rate. Double time is not required by federal law. It usually comes from state rules or an employment contract, for example for hours beyond 12 in a day in California.
When does overtime apply?
The federal rule comes from the Fair Labor Standards Act (FLSA). Most non-exempt employees must be paid overtime for hours worked over 40 in a single workweek. A workweek is any fixed, recurring 168-hour period, and it does not have to match the calendar week. The US Department of Labor explains the federal standard in detail on its overtime pay page.
State law can be stricter, and the stricter rule wins. Key points to check:
- Daily overtime. California, Alaska, Nevada, and a few others require overtime after 8 hours in a day, regardless of the weekly total.
- Double time. A handful of states require double time in specific cases.
- Day-of-rest rules. Some states require a premium for a seventh consecutive workday.
Federal overtime is set by statute, and the text of the FLSA is published by the Legal Information Institute at Cornell Law School. When state and federal rules differ, your employer must follow whichever gives you more.
Who qualifies for overtime?
Not everyone is entitled to overtime. The FLSA splits workers into "non-exempt" (overtime-eligible) and "exempt" (not eligible). Whether you are exempt usually depends on three tests:
- Salary level. You must earn above a set weekly threshold.
- Salary basis. You must be paid a fixed salary that does not vary with hours.
- Job duties. Your role must fit an exempt category, such as genuine executive, administrative, or professional work.
Job titles do not decide this; actual duties do. A salaried "manager" who mostly does line work may still be non-exempt and owed overtime.
How do you calculate overtime for a salaried employee?
A salary does not automatically remove overtime rights. If a salaried worker is non-exempt, you first find their regular hourly rate, then apply the 1.5 premium.
- Work out the hourly rate. Divide the weekly salary by the number of hours it is meant to cover. A $800 weekly salary for a 40-hour week is $20 an hour.
- Apply time and a half to any hours over 40.
So a non-exempt salaried worker on $800 a week who works 45 hours earns their $800 plus 5 hours at $30, an extra $150. The time and a half calculator handles this once you know the hourly rate.
How do bonuses change the regular rate?
This is the part most people miss. Non-discretionary bonuses, such as production or attendance bonuses, must be included in the "regular rate" before overtime is calculated. You cannot calculate overtime on the base wage alone and ignore the bonus.
To do it correctly, add the bonus to total straight-time earnings for the week, divide by total hours worked to get the true regular rate, then pay half that rate again for the overtime hours. Discretionary bonuses and true gifts can be left out. This is a common source of payroll errors and back-pay claims.
Worked example
Say you earn $22 an hour, work 48 hours in a week, and receive no bonus.
- Regular pay: $22 times 40 = $880
- Overtime rate: $22 times 1.5 = $33
- Overtime hours: 48 minus 40 = 8
- Overtime pay: $33 times 8 = $264
- Total pay: $880 plus $264 = $1,144
Your gross pay for the week is $1,144, of which $264 is overtime. Remember this is gross, before tax and other withholding.
How does overtime work with two different pay rates?
Some employees earn different rates for different tasks, for example a higher rate for skilled work and a lower one for setup. When that happens, overtime is not simply based on the higher rate. Instead, the law uses a "weighted average" regular rate.
To find it, add up all straight-time earnings for the week, then divide by the total hours worked. That gives the blended regular rate. Overtime is then paid at half that blended rate for each hour over 40, on top of the straight-time pay you already earned.
For example, say you work 30 hours at $20 and 20 hours at $15 in one week. Straight-time pay is $600 plus $300, or $900. Total hours are 50. The regular rate is $900 divided by 50, or $18. The overtime premium is half of $18, which is $9, for each of the 10 overtime hours, adding $90. So total pay is $990.
Tipped workers follow a related but separate set of rules, because the tip credit affects the regular rate. If your pay structure is unusual, it is worth checking your state labor department's guidance, since several states are stricter than the federal floor.
Common overtime mistakes to avoid
A few errors come up again and again:
- Averaging two weeks. Overtime is calculated per workweek, not per pay period. You cannot average 30 hours one week and 50 the next to dodge the premium.
- Ignoring off-the-clock work. Time spent on required tasks before or after a shift usually counts as hours worked.
- Leaving bonuses out of the regular rate. As above, non-discretionary bonuses must be included.
- Assuming salary means exempt. Exemption depends on salary level and duties, not just being salaried.
Once you know your hourly rate and hours, run the figures through the time and a half calculator for an instant total. If you are weighing a wage increase instead, the pay raise calculator shows how a percentage bump changes your pay.