How Is Overtime Pay Calculated?
The basic rule
Under the federal Fair Labor Standards Act, a covered non-exempt employee earns at least one and a half times their regular rate for every hour worked beyond 40 in a workweek. That is the floor; states and contracts can require more, never less.
week total = rate × hours up to 40 + 1.5 × rate × hours past 40
A $22 an hour worker with a 50-hour week earns 22 × 40 = $880 plus 33 × 10 = $330, so $1,210 — an effective $24.20 for every hour of the week.
The workweek is fixed, and weeks never average
A workweek is a fixed, regularly recurring period of 168 hours: seven consecutive 24-hour days. An employer chooses when it starts and it stays there. Overtime is computed inside that window and nowhere else.
The consequence catches people out on biweekly payroll. A 50-hour week followed by a 30-hour week is not two 40-hour weeks. The first week owes 10 hours of overtime and the second simply pays 30 straight hours; the employer cannot average the two to erase the premium. Offering time off in the following week instead of overtime pay is likewise not allowed for private employers.
Only hours actually worked count
The 40-hour threshold counts worked hours. Paid time that was not worked does not push you over it.
| Week | Worked | Paid but not worked | Hours on the stub | Federal overtime |
|---|---|---|---|---|
| Straight week | 42 | 0 | 42 | 2 h |
| Holiday week | 36 | 8 holiday | 44 | none |
| Sick day plus a long Friday | 38 | 8 sick | 46 | none |
Employers and union contracts often promise better than this and count holiday hours toward the threshold. That is a contractual benefit, not a legal requirement, so it is worth reading your handbook rather than assuming either way.
The regular rate is not always your base rate
This is the part most people have never been told. The rate that gets multiplied by 1.5 is the regular rate, which includes most compensation for the week — shift differentials, production and attendance bonuses, and other non-discretionary payments. Only genuinely discretionary gifts, reimbursements and a few statutory exclusions stay out.
Worked through: $20 an hour, 45 hours, plus a $50 production bonus for the week.
- Straight-time earnings: 20 × 45 + 50 = $950
- Regular rate: 950 ÷ 45 = $21.11, not $20
- Overtime premium on the 5 extra hours: 0.5 × 21.11 × 5 = $52.78
- Week total: 950 + 52.78 = $1,002.78
The bonus raised the overtime rate as well as the paycheck. Getting this wrong in the employer's favour is one of the most common wage claims filed.
Who is covered
Overtime protection depends on classification, not on job title or on being paid a salary. Non-exempt employees are owed it; employees who genuinely meet an exemption test — executive, administrative, professional, outside sales and some computer roles — are not. Both a salary threshold and the actual duties have to line up, and the salary threshold is revised periodically.
Enter your regular rate and the extra hours, and get the overtime rate, the weekly total, and what the whole week actually paid per hour.
Frequently asked questions
How do you calculate time and a half?
Multiply the regular rate by 1.5, then multiply by the number of overtime hours. At $22 an hour the overtime rate is $33, so ten overtime hours add $330 to the week.
Can my employer average two weeks to avoid overtime?
No. Overtime is computed within each fixed workweek, so a 50-hour week followed by a 30-hour week still owes ten hours of overtime for the first week.
Does a bonus change my overtime rate?
Yes, if it is non-discretionary, such as a production or attendance bonus. It is added into the week and divided by hours worked to find the regular rate, which raises the overtime rate above the base hourly figure.
Is overtime paid after 8 hours in a day?
Not under federal law, which counts only hours past 40 in a workweek. Some states add daily rules: California, for example, pays overtime past 8 hours in a day.
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