How to Calculate Overtime Pay

By Jessica Martinez, Contributing Writer, Business & Finance
Updated July 1, 2026

Time and a half means your regular hourly rate multiplied by 1.5. Federal law (FLSA) requires this rate for every hour a nonexempt employee works beyond 40 in a single workweek. Some states have daily overtime rules too, so always check your state's law.

The overtime formula, step by step

• Step 1: Find the regular rate. For hourly workers this is simply the hourly wage. For salaried workers, divide weekly salary by 40.
• Step 2: Calculate the overtime rate. Regular rate x 1.5. At $20/hr the overtime rate is $30/hr.
• Step 3: Count overtime hours. Any hours in the week above 40.
• Step 4: Calculate overtime pay. Overtime rate x overtime hours.
• Step 5: Add to regular pay. (40 x regular rate) + (OT hours x OT rate) = total gross pay.

Worked example: hourly employee

What "double time" means

Some employers and some state laws (notably California) require double time, which is the regular rate x 2.0, for hours beyond a certain daily or weekly threshold. Double time is not required under federal law but may be required by your state or your employment contract.

Salaried nonexempt employees

Many salaried workers are still entitled to overtime. Find their effective hourly rate by dividing their weekly salary by 40, then apply the 1.5x formula for any hours over 40. A salaried employee earning $800/week has an effective rate of $20/hr and an overtime rate of $30/hr.

Which employees are exempt?

Executive, administrative, and professional employees who earn more than the salary threshold set by the Department of Labor are typically exempt from overtime. Exempt status depends on both job duties and salary level. When in doubt, check with the Department of Labor or your payroll provider. See how to calculate total hours worked first to know whether overtime applies.

Overtime rate comparison at common wages

Use this table to find your overtime rate without doing the math:

State overtime laws that go beyond federal rules

Federal law sets the floor, but several states require overtime in situations where federal law would not. Key examples:

• California: Overtime is required after 8 hours in a workday (not just 40 hours in a week) and double time after 12 hours in a day or on the seventh consecutive day of work.
• Alaska: Daily overtime kicks in after 8 hours per day.
• Nevada: Daily overtime applies after 8 hours per day for employees earning less than 1.5 times the minimum wage.
• Colorado: Overtime required after 12 hours in a workday under state wage orders.

Always verify your state's current rules with the state labor agency or a qualified employment professional. This information is provided for general educational purposes only and is not legal advice.

How the FLSA workweek definition affects overtime

Overtime under the FLSA is calculated on a workweek basis, not a pay period basis. A workweek is any fixed recurring period of 168 hours, which is seven consecutive 24-hour periods. Employers choose the start day of their workweek (Sunday through Saturday are common choices), and that day is fixed unless there is a legitimate business reason to change it. This matters because a biweekly pay period covering two weeks contains two separate workweeks for overtime purposes. Hours from one week cannot be averaged into the other. If an employee works 36 hours in week one and 44 hours in week two of a biweekly pay period, they are owed overtime for 4 hours in week two even if the two-week average is 40 hours. Use the time card calculator to track each workweek separately and catch overtime before processing payroll.

The regular rate when employees receive bonuses or shift differentials

The "regular rate" used for overtime calculations is not always just the base hourly wage. Under the FLSA, most non-discretionary bonuses (production bonuses, attendance bonuses, and similar incentive pay) must be folded into the regular rate before computing overtime. For example, if an employee earns a $60 non-discretionary bonus in a 50-hour week, divide $60 by 50 to get $1.20 per hour, add that to the base rate, then apply 1.5x to the combined rate for overtime hours. Discretionary bonuses that are not announced in advance are generally excluded from the regular rate. This corner of wage law gets complicated fast; treat this page as a starting point and check the specifics with a payroll provider or employment attorney.

Two jobs, two rates, one overtime calculation

An employee who splits the week between roles at different pay rates does not get to pick which rate feeds the formula, and by default neither does the employer. The FLSA's standard method, spelled out in 29 CFR 778.115, is a weighted average: total the straight-time earnings from both rates, divide by total hours to find the regular rate, then pay an extra half of that rate for each overtime hour. Half, not 1.5, because the straight-time portion of every hour is already inside the weekly total.

There is an alternative. With an agreement reached before the work is performed, the employer may instead pay 1.5 times the rate of whichever job the overtime hours were actually spent on. Absent that agreement, the weighted average controls.

The fluctuating workweek method

Some employers pay nonexempt workers a fixed salary for hours that swing week to week, then pay overtime as an extra half-time rather than full time and a half. The FLSA allows this (DOL Fact Sheet 82) when the salary is genuinely fixed, covers every hour worked at no less than minimum wage, and both sides clearly understand the arrangement. The math has a property worth seeing before you agree to it: the regular rate falls as hours rise. Here is a $600 fixed weekly salary across two different weeks.

Ten overtime hours in week 2 added $60. Under the standard method, for a worker whose $600 salary covered a 40-hour week at an implied $15 rate, those same ten hours would have added $225. Several states, California and Pennsylvania among them, do not permit the fluctuating workweek under their own wage laws, so whether it can be used at all depends on where the work happens.

Overtime for tipped employees

The overtime rate for a tipped worker is computed on the full minimum wage, never on the $2.13 federal cash wage. At the $7.25 federal minimum, the overtime rate is $10.88. The employer may still take the same $5.12 tip credit against it, which leaves a cash overtime wage of $5.76 per hour. The recurring violation, common enough that the Department of Labor flags it in Fact Sheet 15, is multiplying $2.13 by 1.5 and paying $3.20 for overtime hours. That shorts the worker $2.56 an hour. States with a higher tipped minimum, or no tip credit at all, change the numbers, but the structure holds: overtime math starts from the full applicable minimum wage.

Four errors that generate back-pay claims

• Comp time instead of cash. Private employers cannot bank a nonexempt employee's overtime as future time off; the premium is owed in wages on the regular payday. Public agencies operate under a separate provision that does allow comp time, accrued at 1.5 hours per overtime hour.
• A base rate that ignores bonuses. As covered above, nondiscretionary bonuses belong in the regular rate. Paying 1.5 times the bare hourly wage in a bonus week underpays every overtime hour that week.
• Exemption by job title. Calling someone a manager, or simply paying a salary, does not make them exempt. The duties test decides, and misclassification is among the most common findings in DOL wage investigations.
• Off-the-clock minutes. Answering work messages after a shift, prep work before clocking in, mandatory meetings on a day off: hours worked include time the employer knows about and permits, whether or not anyone scheduled it.

Related reading

• How to calculate hours worked
• Convert minutes to decimal hours
• How many hours you actually work in a year
• Biweekly pay periods explained
• Timesheet with lunch breaks