How overtime pay works: time and a half, double time and the rules
This article is general information, not financial, tax or legal advice. Rules and rates differ by country and change over time; the figures here illustrate the mechanics. For decisions involving real money or legal obligations, check the current official rules or consult a professional.
Overtime pay is extra pay for hours worked beyond a set threshold. Under US federal law, non-exempt employees must be paid at least one and a half times their regular rate for every hour over 40 in a workweek, so someone earning $20 an hour gets $30 for each overtime hour. Other countries, and some US states, set different rules. The overtime pay calculator uses the US federal defaults but lets you change every assumption, and this guide explains them.
The US federal rule
The Fair Labor Standards Act (FLSA) requires overtime at time and a half (1.5 times the regular rate) for hours worked over 40 in a workweek by non-exempt employees. Federal law does not require overtime for working more than eight hours in a day, for weekends or for public holidays, and it does not require double time; those come from state law, union agreements or employer policy. The overtime rate is based on the regular rate, which for hourly workers is usually the hourly rate but can include some non-discretionary bonuses and shift differentials, which can raise the overtime rate above 1.5 times the base wage.
Calculating overtime
The calculation has three steps: split the hours into regular and overtime, multiply each by its rate, and add them up. For $20 an hour and 48 hours in a week:
- Regular pay: 40 hours × $20 = $800.
- Overtime pay: 8 hours × $30 = $240.
- Gross pay for the week: $1,040.
The calculator does the same, with fields for the threshold and the multiplier (1.5×, 2× or 1.25×) and an optional point after which double time applies. All results are gross pay, before tax and other deductions; the paycheck calculator estimates take-home pay from there.
The workweek and averaging
Under the FLSA, the workweek is a fixed, recurring period of 168 hours (seven consecutive 24-hour days) set by the employer, and each workweek stands alone. Hours cannot be averaged across two weeks, even if you are paid every two weeks. If you work 30 hours one week and 50 the next, you are owed 10 hours of overtime for the second week, even though the fortnight totals 80 hours. Accurate time records matter for this reason; the hours calculator and the timesheet calculator turn start and end times into weekly totals, and How to track your work hours honestly covers good habits.
Who is exempt
Not every employee is entitled to overtime. The FLSA exempts certain executive, administrative and professional employees who are paid a salary above a minimum level and whose job duties meet specific tests, along with some other categories such as certain outside sales and computer roles. A job title alone does not decide exemption, and being paid a salary does not by itself make someone exempt: salaried non-exempt employees are still owed overtime. Because the salary threshold and duties tests are set by regulation and have been changed and challenged in court, check the current Department of Labor guidance or ask an employment adviser if you are unsure of your status.
State and international rules
States can give workers more than the federal minimum. California, for example, requires overtime after eight hours in a workday as well as after 40 in a week, and double time after 12 hours in a day; the calculator's double-time field covers simple cases like this, but daily rules need you to enter hours carefully. Outside the US the picture changes completely. In the UK there is no general legal right to extra pay for overtime; it depends on your contract, although average pay for all hours worked must not fall below the minimum wage, and the Working Time Regulations limit average working time to 48 hours a week unless you opt out. Many other countries set statutory premiums or offer time off in lieu instead. Always check the rules where you work and your own contract.
Checking your pay
To check a payslip, total your hours for each workweek, split them at the threshold, and multiply by your regular rate and overtime rate. If you received a bonus tied to performance or attendance, ask how it was included in the regular rate. Compare the result with the overtime line on your payslip; How to read a payslip, line by line explains where to find it. If the numbers do not match, raise it with payroll first, and keep your own records of start and finish times, because they are the strongest evidence if there is a dispute. The time tracker keeps a running log in your browser.
Sources and further reading
The claims in this guide rest on these references, which were checked when the guide was last updated. Spotted an error? The contact page says how to report it.