What Is Overtime Pay?
Overtime pay is the additional compensation employees receive for working beyond the standard 40-hour workweek. Under the Fair Labor Standards Act (FLSA), non-exempt employees must be paid at least 1.5 times their regular hourly rate (time-and-a-half) for every hour worked over 40 in a workweek. Some employers, union contracts, and state laws provide double-time pay for hours worked beyond a certain threshold or on holidays.
This calculator helps workers and employers quickly determine overtime pay amounts, total weekly compensation, and annualized earnings including overtime. Whether you are budgeting your household finances, negotiating employment terms, or managing payroll, understanding overtime calculations is essential for accurate financial planning.
How Overtime Is Calculated
The basic overtime formula is: Overtime Pay = Overtime Hours × (Hourly Rate × OT Multiplier). For standard time-and-a-half: if your hourly rate is $20 and you work 10 overtime hours, your OT pay is 10 × ($20 × 1.5) = 10 × $30 = $300. Your total weekly pay would be regular pay ($20 × 40 = $800) plus overtime ($300) = $1,100.
The FLSA defines the workweek as any fixed, regularly recurring period of 168 hours (seven consecutive 24-hour periods). It does not require overtime for weekends, holidays, or rest days specifically — only for hours exceeding 40 in the defined workweek. However, many employers voluntarily pay premium rates for weekend or holiday work.
Who Qualifies for Overtime?
Non-exempt employees are entitled to overtime under the FLSA. Most hourly workers are non-exempt. Exempt employees — typically salaried workers in executive, administrative, professional, computer, or outside sales roles earning above a salary threshold — are not entitled to overtime. As of 2024, the salary threshold for exemption is $35,568 per year ($684 per week), though the Department of Labor periodically updates this figure.
Some states have more generous overtime rules than federal law. California, for example, requires overtime after 8 hours in a single day (not just 40 in a week) and double-time after 12 hours. Alaska, Nevada, and Colorado also have daily overtime provisions. Always check your state labor laws for applicable rules.
State-Specific Overtime Rules
While federal law sets the baseline, several states expand overtime protections. California requires time-and-a-half after 8 hours/day and double-time after 12 hours/day. Colorado requires OT after 12 hours/day or 40 hours/week. Alaska requires OT after 8 hours/day or 40 hours/week. These state rules apply in addition to (not instead of) federal rules, with the higher standard prevailing.
Common Overtime Mistakes
Averaging hours across weeks: Overtime is calculated on a weekly basis. An employer cannot average 50 hours one week and 30 the next to avoid paying overtime. Misclassifying employees: Labeling workers as "exempt" or "independent contractors" to avoid overtime is a common violation. Classification depends on actual job duties and compensation, not job titles.
Excluding bonuses: Non-discretionary bonuses, shift differentials, and commissions may need to be included in the regular rate for overtime calculations. The regular rate is not always the same as the base hourly rate. Comp time in lieu of OT: Private-sector employers generally cannot offer compensatory time off instead of overtime pay. This option is available primarily to government employees.