Originally published at https://pay.thicket.sh/blog/how-is-overtime-pay-calculated.
By Jamie Reeves, Personal Finance Writer
Overtime pay is calculated at 1.5× your regular rate of pay for every hour worked over 40 in a single workweek, under the federal Fair Labor Standards Act (FLSA). The formula is: overtime pay = regular hourly rate × 1.5 × overtime hours. A $20/hour employee who works 45 hours earns $20 × 1.5 = $30 per overtime hour × 5 hours = $150 in overtime, on top of $800 straight-time pay, for a $950 week. Federal law requires overtime only over 40 hours per week — not for long days or weekends — unless a stricter state law applies.
The rule sounds simple, and for a plain hourly worker it is. The complications come from the definition of “regular rate,” salaried non-exempt workers, bonuses, and state daily-overtime rules. Here is the full calculation, straight from the US Department of Labor.
The Federal Overtime Formula
The US Department of Labor (dol.gov/agencies/whd/overtime) sets the rule: non-exempt employees must be paid at least time-and-a-half for hours over 40 in a workweek. In two steps:
- Overtime rate = regular hourly rate × 1.5
- Overtime pay = overtime rate × hours over 40 Your total for the week is straight-time pay for the first 40 hours plus the overtime pay for the rest. A workweek is any fixed, recurring 168-hour (7-day) period your employer sets — it does not have to be Monday–Sunday, but it cannot shift week to week to dodge overtime.
Worked Examples at Every Hourly Rate
Overtime rate and pay for common wages, assuming a straight base rate and time-and-a-half:
Regular RateOvertime Rate (1.5×)5 OT Hours10 OT HoursTotal for a 50-Hour Week$15.00$22.50$112.50$225.00$825.00$18.00$27.00$135.00$270.00$990.00$20.00$30.00$150.00$300.00$1,100.00$25.00$37.50$187.50$375.00$1,375.00$30.00$45.00$225.00$450.00$1,650.00$40.00$60.00$300.00$600.00$2,200.00$50.00$75.00$375.00$750.00$2,750.00
The 50-hour column is 40 hours at the regular rate plus 10 hours at the overtime rate. Run your own numbers in the overtime pay calculator.
The Catch: What Counts as the “Regular Rate”
The biggest calculation mistake is using base wage when the law requires the regular rate. Per DOL regulation 29 CFR §778, the regular rate must fold in nondiscretionary bonuses, shift differentials, and commissions, then divide by total hours worked. Example: $20/hour plus a $100 weekly production bonus, 45 hours worked.
- Straight-time earnings: (45 × $20) + $100 = $1,000
- Regular rate: $1,000 ÷ 45 = $22.22
- Overtime premium (the extra half): 0.5 × $22.22 × 5 = $55.56
- Total week: $1,000 + $55.56 = $1,055.56 Discretionary bonuses, holiday gifts, and expense reimbursements are excluded from the regular rate. Get the inclusion wrong and you underpay overtime — one of the most common and costly wage-and-hour violations.
Overtime for Salaried (Non-Exempt) Employees
Being on salary does not automatically waive overtime. A salaried worker is owed overtime if they earn below the FLSA salary threshold ($58,656/year under the 2024 DOL rule) or fail the duties test. To calculate, convert the salary to an hourly regular rate:
- $50,000 salary meant to cover a 40-hour week
- Weekly salary: $50,000 ÷ 52 = $961.54
- Regular rate: $961.54 ÷ 40 = $24.04
- Overtime for 10 extra hours: 1.5 × $24.04 × 10 = $360.60 For who qualifies as exempt versus non-exempt and the state thresholds, see our 2026 overtime pay rules guide. To sanity-check what a salary works out to per hour in the first place, use the hourly-to-salary converter.
State Rules That Change the Math
The FLSA is a floor. Some states are more generous, and the more-generous rule wins:
StateOvertime TriggerDouble-Time TriggerFederal (FLSA)Over 40 hrs/weekNoneCaliforniaOver 8 hrs/day or 40/weekOver 12 hrs/day, or over 8 hrs on 7th consecutive dayAlaskaOver 8 hrs/day or 40/weekNoneColoradoOver 12 hrs/day or 40/weekNoneNevadaOver 8 hrs/day (under 1.5× min wage) or 40/weekNone
Is Overtime Taxed More? No.
Overtime is taxed at your normal marginal rate — the IRS does not have a special overtime rate. A single big paycheck can look over-taxed because withholding tables annualize the spike, but you recover the difference at filing. FICA applies the same way. For the full picture of what leaves every check, see how much taxes are taken out of my paycheck and FICA vs federal income tax.
Turning Overtime Into Long-Term Money
Overtime is one of the fastest ways to boost income, but only if it goes somewhere. Routing consistent overtime into savings or retirement compounds — our sister site breaks down the target in how much do I need to retire.
Sources and Methodology
Overtime rules and the 40-hour standard: US Department of Labor, Wage and Hour Division — Overtime. Regular-rate inclusions: DOL Fact Sheet 56A (29 CFR §778). Salary threshold: DOL 2024 overtime final rule. Tax treatment of overtime: IRS Publication 15-T. State rules from each state’s labor department. Last updated July 8, 2026.
Frequently Asked Questions
Under the federal Fair Labor Standards Act (FLSA), overtime is paid at 1.5 times your regular rate of pay for every hour worked over 40 in a single workweek. The formula is: overtime pay = regular hourly rate × 1.5 × overtime hours. For a $20/hour worker who works 45 hours, that is $20 × 1.5 = $30 per overtime hour × 5 hours = $150 in overtime, on top of $800 in regular pay for a $950 week. The FLSA does not require overtime for hours over 8 in a day or for weekends — only for hours over 40 in the week — unless your state (like California) has stricter daily rules.Federal law sets the minimum overtime rate at 1.5× (time-and-a-half) the regular rate. Some employers or union contracts pay 2× (double time) for holidays or hours beyond a threshold, but that is a policy or state-law choice, not a federal requirement. California requires double time after 12 hours in a day or after 8 hours on the seventh consecutive workday. The federal FLSA floor is time-and-a-half over 40 hours per week, nothing more.The regular rate is not always just your base hourly wage. Under 29 CFR §778, it must include nondiscretionary bonuses, shift differentials, and commissions earned that week — divided by total hours worked. If you earn $20/hour plus a $100 weekly production bonus and work 45 hours, your regular rate is ($900 + $100) ÷ 45 = $22.22, and the overtime premium is half that ($11.11) × 5 hours = $55.56 extra on top of straight-time pay. Discretionary bonuses, gifts, and expense reimbursements are excluded from the regular rate.Yes, if they are non-exempt. A salaried worker earning below the FLSA salary threshold ($58,656/year under the 2024 Department of Labor rule) or whose duties do not qualify for an exemption is owed overtime. The regular rate is found by dividing the weekly salary by the hours it is meant to cover. A $50,000 salaried non-exempt employee working 50 hours has a regular rate of about $24.04 ($50,000 ÷ 52 ÷ 40), and the 10 overtime hours pay 1.5 × $24.04 = $36.06 each, roughly $361 extra that week.No. The IRS treats overtime exactly like regular wages — it is added to your gross income and taxed at your normal marginal rate. Overtime can feel more heavily taxed because a bigger paycheck pushes that single check into a higher withholding tier under the IRS Publication 15-T tables, which annualize the spike. You recover any over-withholding when you file. FICA (6.2% Social Security up to the wage base, 1.45% Medicare) applies to overtime the same way it applies to regular pay.When you work two jobs at different rates for the same employer, the FLSA uses a weighted-average regular rate: total straight-time earnings divided by total hours. If you work 30 hours at $18 and 20 hours at $12 (50 hours total), straight-time pay is $540 + $240 = $780, and the regular rate is $780 ÷ 50 = $15.60. The overtime premium on the 10 hours over 40 is 0.5 × $15.60 = $7.80 each, so total pay is $780 + $78 = $858.
Calculate Your Overtime Instantly
Enter your hourly rate, regular hours, and overtime hours. The calculator returns your regular pay, overtime pay at 1.5× or 2×, and total for the week. Free and instant.
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