Overtime pay is time and a half for covered hours over 40 in a workweek. The arithmetic takes two lines. The parts that trip people up are who is covered, what the "regular rate" includes and which hours count.
The basic formula
Overtime hours = hours worked in the workweek - 40
Overtime pay = overtime hours x hourly rate x 1.5
Total pay = (regular hours x rate) + overtime pay
Example
A worker earns $24.00 an hour and works 46 hours. Regular pay is 40 x $24 = $960.00. Overtime is 6 hours x $24 x 1.5 = 6 x $36 = $216.00. Total gross pay is $1,176.00.
| Hours worked | Regular pay | Overtime pay | Total |
|---|---|---|---|
| 38 | $912.00 | $0.00 | $912.00 |
| 40 | $960.00 | $0.00 | $960.00 |
| 44 | $960.00 | $144.00 | $1,104.00 |
| 46 | $960.00 | $216.00 | $1,176.00 |
| 50 | $960.00 | $360.00 | $1,320.00 |
Who is entitled to overtime
The Fair Labor Standards Act (FLSA) requires overtime for non-exempt employees. Many salaried workers are exempt, but being paid a salary is not enough. To be exempt, a worker generally must be paid at least a minimum weekly salary (the federal level has been $684 a week, which is $35,568 a year, when this guide was written) and must perform qualifying duties such as executive, administrative or professional work. Check the Department of Labor site for the current level because it can change.
The regular rate is not always the hourly rate
The regular rate includes most pay for the week, such as non-discretionary bonuses and shift differentials, divided by the hours actually worked. Once a bonus is added, the rate used for overtime rises.
Example with a bonus: $20.00 an hour, 50 hours and a $100 production bonus. Straight-time pay for all hours is $1,000 plus the $100 bonus, so $1,100. The regular rate is $1,100 / 50 = $22.00. Only the extra half-time premium is still owed on the 10 overtime hours: 0.5 x $22.00 x 10 = $110. Total pay is $1,210.00.
The overtime calculator has fields for bonuses and double-time hours.
What federal law does not require
- Daily overtime. A 12-hour day alone does not trigger federal overtime if the week stays at or under 40.
- Extra pay on weekends or holidays. These are due only if hours pass 40 or an agreement says so.
- Double time. The federal rate is 1.5. Double time comes from state law, contracts or employer policy.
When state law differs
Federal law is a floor, and states may be more generous. California, Alaska, Nevada and Colorado, for example, add daily overtime rules. When both apply, the employee gets the rule that is more favorable. SumPanda calculates the federal rule only. For state rules, use your state labor department.
Common mistakes
- Averaging two weeks instead of judging each week alone.
- Using the base hourly rate when a bonus applies.
- Counting unpaid meal breaks as hours worked.
- Treating a salaried title as proof of exemption.