How overtime pay is calculated
In the US, overtime is usually paid at 1.5 times your regular rate (“time and a half”). At $22 an hour, the overtime rate is $33. Working 48 hours in a week means 40 × $22 = $880 plus 8 × $33 = $264, for $1,144 gross.
US overtime rules (FLSA)
- Under the federal Fair Labor Standards Act, non-exempt employees must get at least time and a half for hours over 40 in a workweek.
- Federal law doesn’t require daily overtime or double time, but some states do. California requires 1.5× after 8 hours in a day and 2× after 12 hours, plus rules for the seventh consecutive workday. Alaska, Nevada and Colorado also have daily overtime rules.
- Many salaried employees in executive, administrative or professional roles are exempt from overtime if they meet salary and duties tests.
- The “regular rate” can include shift differentials and non-discretionary bonuses, which raises the overtime rate.
Overtime in other countries
In the UK, there’s no legal right to extra pay for overtime — it depends on your contract — though average pay can’t fall below the National Minimum Wage, and working time is generally limited to an average of 48 hours a week unless you opt out. In Canada and Australia, overtime rules depend on the province or the applicable award or agreement.
Is overtime taxed more?
Overtime is taxed as ordinary income. Because a bigger paycheck can raise the amount withheld that period, it may look like overtime is taxed more, but your actual tax is settled on your annual return. Estimate take-home pay with the paycheck calculator, and total your hours with the time card calculator.
Frequently asked questions
How do I calculate time and a half?
Multiply your hourly rate by 1.5 — $20 per hour becomes $30 for overtime hours.
When does overtime start?
Under US federal law, after 40 hours in a workweek. Some states also have daily overtime.
What is double time?
Twice your regular hourly rate, required in some states (like California after 12 hours in a day).
Are salaried employees paid overtime?
Non-exempt salaried employees are; exempt employees who meet salary and duties tests are not.