Finance · 4 min read

How Is Overtime Pay Calculated?

Overtime pay is calculated by multiplying your regular hourly rate by 1.5, then applying that rate to every hour worked beyond 40 in a single workweek. Our overtime calculator does this math for you automatically, but it helps to understand how the number is actually built.

The federal overtime rule

Under the Fair Labor Standards Act (FLSA), most hourly employees in the US are entitled to overtime pay of at least 1.5 times their regular rate for any hours worked over 40 in a workweek. This is often called time and a half. A workweek is a fixed, recurring period of 168 hours (seven 24 hour days) set by the employer, and it does not have to match the calendar week.

The basic formula

• Regular hourly rate: $20.00
• Overtime rate: $20.00 x 1.5 = $30.00 per hour
• Hours worked: 45
• Regular pay: 40 x $20.00 = $800.00
• Overtime pay: 5 x $30.00 = $150.00
• Total pay: $950.00

Only the hours past 40 get the higher rate. The first 40 hours are always paid at your normal rate, regardless of how the rest of the week shakes out.

What counts as your "regular rate"

Your regular rate isn't always just your posted hourly wage. If you receive certain bonuses or shift differentials, the law generally requires folding those into the regular rate before applying the 1.5x multiplier, which can push your true overtime rate slightly higher than a simple hourly figure would suggest. Discretionary bonuses and most benefits are typically excluded from this calculation. If your pay includes non-hourly components, check with your employer or a payroll specialist on how they're factored in, since the rules here have real exceptions.

Salaried employees and overtime

Salaried status alone doesn't rule out overtime eligibility. Whether a salaried worker qualifies depends on their job duties and salary level under FLSA exemption tests, not simply on being paid a salary instead of an hourly wage. Employees classified as exempt (commonly certain executive, administrative, and professional roles that meet specific salary and duties thresholds) are not entitled to overtime, while non-exempt salaried employees are. To calculate overtime for a non-exempt salaried worker, first convert the weekly salary into an equivalent hourly rate by dividing it by the number of hours it's meant to cover, then apply the same 1.5x rule to hours beyond 40.

Daily overtime rules vary by state

The federal rule is based purely on a 40 hour workweek total. Some states go further. California, for example, generally requires overtime pay for hours worked beyond 8 in a single day, in addition to the weekly 40 hour threshold, and can require double time in certain circumstances. Always check your specific state's labor rules alongside the federal standard, since state law applies whenever it's more generous to the employee.

Checking your own paycheck

To verify your overtime pay is correct, start by identifying your regular hourly rate, confirm how many hours you actually worked in the employer's defined workweek, then apply the formula above to the hours above 40. Enter your own numbers into the overtime calculator to see the full breakdown, including regular pay, overtime pay, and the total for the week.

A quick example with a higher rate

Someone earning $28.00 an hour who works 50 hours in a week would earn $1,120.00 in regular pay for the first 40 hours, plus $420.00 in overtime pay for the remaining 10 hours at $42.00 per hour, for a total of $1,540.00. That extra 10 hours pays noticeably more per hour than the rest of the week, which is the entire point of the overtime premium.

Frequently asked questions