How to Calculate Overtime Pay (With Examples)

Overtime is the most commonly miscalculated line on a paycheck. The federal rule is simple — hours worked beyond 40 in a workweek get paid at 1.5× your regular rate — but the details (what counts as the "regular rate," whether salaried workers get overtime, what your state adds on top) are where paychecks quietly go wrong.

This guide walks the math through every common case: straight hourly, fractional rates, salaried-but-nonexempt, and double time. It reflects US federal rules (FLSA); where states are stricter, the state rule wins.

The federal rule in one sentence

Under the Fair Labor Standards Act, nonexempt employees must be paid at least 1.5× their regular rate for every hour worked over 40 in a single workweek. Two load-bearing words:

• Nonexempt — most hourly workers are; being paid a salary alone does not make you exempt (see the salaried section below).
• Workweek— a fixed 168-hour block your employer defines. Hours don't average across weeks: two 45-hour weeks followed by two 35-hour weeks still owe 10 overtime hours (the 5 spare hours in the light weeks don't erase them).

The formula

Worked example: $20/hour, 46-hour week

• Regular rate: $20.00/hour
• Overtime rate: $20 × 1.5 = $30.00/hour
• Regular pay: 40 × $20 = $800.00
• Overtime pay: 6 × $30 = $180.00

Notice what overtime is not: you don't get 1.5× on the whole check — only the hours past 40. The first 40 hours stay at straight time. In this example the effective blended rate is $980 ÷ 46 = $21.30/hour.

Worked example: fractional rate, $22.50/hour, 47-hour week

• Overtime rate: $22.50 × 1.5 = $33.75/hour
• Regular pay: 40 × $22.50 = $900.00
• Overtime pay: 7 × $33.75 = $236.25

A quick cross-check trick: a week with overtime hours pays the same as a straight-time week of 40 + 1.5 × (overtime hours). Here that's 40 + 1.5 × 7 = 50.5 base-hour equivalents, and $22.50 × 50.5 = $1,136.25 — same answer, one multiplication.

Salaried but nonexempt: the two-step regular rate

This is the case most people get wrong. If you're paid a salary but your job doesn't meet an exemption (salary level and duties tests), you still earn overtime. First derive the regular rate from the salary, then apply 1.5×:

• Salary $832/week for a 40-hour schedule → regular rate = 832 ÷ 40 = $20.80/hour
• Overtime rate = 20.80 × 1.5 = $31.20/hour
• 45-hour week: $832 + 5 × $31.20 = $832 + $156 = $988.00

For a fluctuating schedule under a fixed salary, the "fluctuating workweek" method pays overtime at 0.5× the implied rate instead — legal when set up correctly, and a reason to check your pay stub's arithmetic rather than assume.

What counts in the "regular rate"

The regular rate isn't just your base hourly number — it's base pay plus most nondiscretionary compensation, divided by hours worked:

• Included: shift differentials, nondiscretionary bonuses, commissions earned in the period
• Excluded: gifts, discretionary bonuses, vacation/holiday pay for hours not worked, expense reimbursements

Worked example: $20/hour base, a $200 production bonus, 50 hours worked. Regular rate = (50 × $20 + $200) ÷ 50 = $1,200 ÷ 50 = $24.00/hour— not $20. If the 10 overtime hours were already paid at $30 (1.5 × the base rate), the week still owes a premium of 0.5 × $24 × 10 = $120on top, because the bonus raised the true regular rate. That catch-up premium is what employers most often miss.

Daily overtime and double time: the state layer

Federal law has no daily overtime and no double time — but several states add them, and the rule more favorable to the employee applies:

• California:1.5× after 8 hours/day (and after 40/week); double time after 12 hours/day and after 8 hours on the 7th consecutive workday
• Colorado: 1.5× after 12 hours/day; Alaska & Nevada: daily thresholds for certain employers/shift lengths
• Holiday/weekend premiums(like "double time on Thanksgiving") are contractual — company policy or union agreement, not law. Federal law owes you nothing extra for working a holiday beyond normal overtime rules.

A double-time example: at $20/hour, an 8-hour holiday shift paid at 2× = 8 × $40 = $320— but that's the policy's promise, not the FLSA's.

Common mistakes that cost real money

• "Salaried means no overtime." Only exempt salaried roles skip overtime — exemption depends on duties and salary level, not the payment method. Misclassification is one of the most common wage violations.
• Averaging weeks. 45 + 35 hours across two weeks is 5 hours of overtime in week one, not zero. Comp time instead of OT pay is generally illegal in the private sector.
• Excluding bonuses from the regular rate. Nondiscretionary bonuses must raise the overtime rate for the period they cover.
• "Unauthorized" overtime.If you worked it, it's payable — employers may discipline the scheduling, not refuse the pay.
• Rounding that always favors the employer. Seven-minute rounding is legal only if neutral in practice; systematic downward rounding is a classic class-action fact pattern. Our overtime tracking checklist shows exactly what to log each week to catch these.

Frequently Asked Questions

What is overtime pay for a $20-an-hour job?

$30.00 per hour (20 × 1.5) for every hour past 40 in a workweek. A 46-hour week pays $800 in regular wages plus $180 in overtime — $980 total.

Is overtime calculated per day or per week?

Federally, per workweek — hours over 40 in the week trigger overtime, with no daily trigger. Some states (most notably California, plus Colorado, Alaska, and Nevada in specific cases) add daily overtime after 8 or 12 hours. Where both apply, you get whichever rule pays more.

Do salaried employees get overtime?

Exempt salaried employees don't. Nonexempt salaried employees do — divide the weekly salary by the scheduled hours to get the regular rate, then pay 1.5× that for overtime hours. A $832/week nonexempt salary implies a $20.80 regular rate and $31.20 overtime rate.

Does working a holiday automatically mean double time?

Not under federal law. Holiday premiums exist only if an employer policy, contract, or state rule grants them. Overtime rules still apply normally — a holiday hour that pushes you past 40 is overtime at 1.5× regardless.

How do I calculate overtime if my hours and minutes are on a time card?

Convert minutes to decimal hours first (30 min = 0.5, 45 min = 0.75), total the week, and apply overtime to everything above 40. The time card calculator does the whole week automatically, and the time card guide shows the manual method.

What if my employer pays "straight time" for everything?

Paying your base rate for overtime hours is a violation for nonexempt workers — the missing 0.5× premium is recoverable, often for a 2-year lookback (3 if willful). Start by comparing your own records to your stubs; the checklist below covers what to keep.

Related Calculators

• Overtime Tracking Checklist — Weekly log of hours, rates, and pay to verify every check
• Time Card Calculator — Week of shifts → decimal hours, overtime split, and pay
• Hourly to Salary Calculator — Compare rates across pay structures
• How to Calculate Work Hours on a Time Card — The hours-and-minutes companion skill