Guide
How to Calculate Overtime Pay
Overtime pay is your regular rate multiplied by an overtime rate — usually time and a half — for the hours over a threshold. The arithmetic is simple; the parts that need care are the regular rate and the threshold, both of which depend on your situation and location.
The formula
overtime rate = regular hourly rate × multiplier
overtime pay = overtime rate × overtime hours
gross pay = regular hours × regular rate + overtime pay
Example: $20 an hour, 46 hours in the week, US federal rule. 40 hours at $20 is $800. 6 overtime hours at $30 (1.5 × $20) is $180. Gross pay is $980.
What "time and a half" means
1.5 times the regular rate. On $18 an hour that is $27. "Double time" is 2× ($36) — where it applies at all; see what is double-time pay. Some awards and contracts use other multipliers.
The regular rate is not always your hourly wage
Under the FLSA, the "regular rate" includes almost all compensation for the week, not just your base wage. It must be recalculated when your pay is not a simple hourly amount:
- Salaried non-exempt: divide the weekly salary by the hours it is intended to cover. A $800/week salary for a 40-hour week is a $20 regular rate; overtime hours are then paid at $30 on top.
- Two pay rates in one week: the regular rate is the
weighted average. 20 hours at $18 and 25 hours at $22 =
(360 + 550) ÷ 45 = $20.22; the 5 overtime hours get an extra 0.5 × $20.22 on top of their straight-time pay. - Non-discretionary bonuses and commission: a production or attendance bonus is added into the regular rate for the weeks it covers, which raises the overtime rate for those weeks. A $100 weekly bonus on 50 hours adds $2/hour to the regular rate.
- Shift differentials (e.g. +$1.50/hour for nights) are part of the regular rate too.
- Excluded: discretionary bonuses, gifts, paid-leave cash-outs, and reimbursements do not enter the regular rate.
Worked example: salaried non-exempt with a bonus
Salary $1,000/week for 40 hours, plus a $150 non-discretionary bonus, 48 hours worked:
- Straight-time compensation: $1,000 + $150 = $1,150 for 48 hours.
- Regular rate:
1150 ÷ 48 = $23.96. - Overtime premium:
0.5 × 23.96 × 8 = $95.84. - Total:
1150 + 95.84 = $1,245.84.
Weekly vs daily thresholds
US federal law counts overtime by the workweek — over 40 hours in a fixed seven-day span — not by the day or the pay period. Working 12 hours on Monday and 4 hours a day the rest of the week (28 total) is 40 hours: no federal overtime. Some states add daily overtime:
| Where | Overtime threshold | Rate |
|---|---|---|
| US — federal (FLSA) | Over 40 hours / week | 1.5× |
| US — California | Over 8 / day or 40 / week; over 12 / day | 1.5× then 2× |
| US — Alaska, Nevada | Over 8 hours / day (conditions apply) | 1.5× |
| Canada — Ontario | Over 44 hours / week | 1.5× |
| Canada — federal | Over 40 hours / week | 1.5× |
| United Kingdom | No statutory overtime rate — set by contract | Contractual |
| Australia | Set by the relevant modern award (often 38-hour week) | Award-based, often 1.5× then 2× |
These are calculation starting points, not legal advice — your entitlement depends on your classification, award or contract, and current law. The UK's 48-hour Working Time limit caps average weekly hours for health and safety; it does not require overtime pay.
Do salaried employees get overtime?
Often not. Under the FLSA, employees classified as exempt — which generally requires being paid on a salary basis, above the salary threshold, and primarily performing exempt duties — are not entitled to overtime. Non-exempt employees are, whether paid hourly or by salary. The full test is in exempt vs non-exempt employees.
Comp time, and being paid "straight time" for overtime
Private-sector employers generally cannot swap overtime pay for time off ("comp time") — that is only lawful for many public-sector employers. Paying non-exempt overtime at straight time, or averaging hours across two weeks to avoid a 40-hour week, is also not allowed.
Is overtime taxed more?
No — overtime is taxed like any wages. A large paycheck can be over-withheld because payroll annualises it, but that evens out at tax time. A temporary 2025–2028 federal deduction for the overtime premium also exists. See is overtime taxed more?
Frequently asked questions
Does overtime start after 40 or 44 hours?
40 under US federal law and Canadian federal law; 44 in Ontario. Your province, state, or contract may differ.
Is a holiday or vacation day "hours worked" for overtime?
Under federal law, no — only hours actually worked count toward the 40. Some contracts are more generous.
Calculators
- Overtime Calculator — enter your rate and hours, pick a rule or set your own multiplier and threshold.
- Time Card Calculator — a full week of shifts with the daily and weekly split applied.
- Hourly Pay Calculator — gross pay projections including overtime.
Sources
- US Department of Labor, Wage and Hour Division — Overtime Pay (Fair Labor Standards Act)
- US Department of Labor — Fact Sheet #56A: Regular Rate under the FLSA
- California Department of Industrial Relations — Overtime
- Ontario — Employment Standards Act: Overtime
- GOV.UK — Overtime: your rights
- Fair Work Ombudsman — Overtime pay
See the Methodology & Sources page for how these rules are applied in the calculator.