Overtime Pay Calculator

What Is Overtime Pay?

Overtime pay is additional compensation for hours worked beyond the standard 40-hour workweek. Under the Fair Labor Standards Act (FLSA), non-exempt employees in the United States must receive overtime pay at a rate of at least 1.5 times their regular hourly rate for every hour worked over 40 in a single workweek. This mandatory premium is designed to discourage employers from working employees excessive hours while fairly compensating those who do work overtime.

The concept of overtime pay dates back to the early 20th century labor reform movement. The FLSA, signed into law in 1938 by President Franklin D. Roosevelt, established the 40-hour workweek and required overtime pay as a way to spread employment during the Great Depression. Today, overtime laws protect millions of workers and ensure fair compensation for additional work.

FLSA Federal Overtime Rules

The Fair Labor Standards Act (FLSA) is the primary federal law governing overtime in the United States. Key provisions include:

Provision	Details
40-Hour Threshold	Overtime must be paid for all hours worked over 40 in a single workweek. A workweek is a fixed, recurring period of 168 hours (7 consecutive 24-hour periods).
Minimum Multiplier	The overtime premium must be at least 1.5x (time and a half) the regular rate of pay. Employers may pay more if required by contract or state law.
Regular Rate	The regular rate includes all compensation: hourly wages, commissions, non-discretionary bonuses, and piece-rate earnings divided by total hours worked. Discretionary bonuses and gifts may be excluded.
Exempt vs. Non-Exempt	Employees in executive, administrative, professional, computer, and outside sales roles may be exempt if they meet salary and duties tests. The current salary threshold is $684/week ($35,568/year).
Workweek Rule	Overtime is calculated per workweek, not per pay period. Hours cannot be averaged across multiple weeks. Each workweek stands alone for overtime calculations.

The regular rate of pay is a critical concept. It is calculated by dividing total compensation (excluding legally excludable items) by total hours worked in the workweek. This means that non-discretionary bonuses and commissions can increase the regular rate, potentially raising the overtime rate for that week.

Who Qualifies for Overtime?

Employees are classified as either exempt or non-exempt for overtime purposes. Non-exempt employees are entitled to overtime pay; exempt employees are not. The determination depends on three tests:

• Salary Basis Test: The employee must be paid a predetermined and fixed salary that is not subject to reduction based on quality or quantity of work.
• Salary Level Test: The employee must earn at least $684 per week ($35,568 per year). Highly compensated employees earning $107,432+ annually may qualify for a streamlined exemption test.
• Duties Test: The employee's primary duties must involve executive management, administrative work requiring discretion, learned/specialized knowledge, creative professional work, computer analysis/design, or outside sales.

Common non-exempt roles include retail workers, manufacturing employees, restaurant staff, construction workers, and administrative assistants. Common exempt roles include executives, managers (who supervise 2+ employees), doctors, lawyers, teachers, and outside sales representatives.

Some employees are specifically exempted by statute, including farm workers, certain transportation workers, and employees of seasonal amusement parks. Independent contractors (1099 workers) are not covered by FLSA overtime as they are not considered employees.

Common Overtime Multipliers and When They Apply

Multiplier	Common Name	When It Applies
1.25x	Time and a Quarter	Some collective bargaining agreements, certain state-specific overtime thresholds, or contract work for specialized industries
1.5x	Time and a Half	Standard FLSA overtime for hours over 40/week; California daily overtime (hours 8-12); Saturday work in some union contracts
2.0x	Double Time	Holidays, Sundays in some states/industries; California daily overtime (over 12 hours); 7th consecutive day in some states; many union contracts
3.0x	Triple Time	Rare; typically reserved for major holidays (Christmas, Thanksgiving) in certain union contracts or highly specialized on-call work

State Overtime Variations

While the FLSA sets the federal minimum, many states have enacted their own overtime laws that provide greater protections. When both federal and state law apply, the law providing the higher benefit to the employee governs. Key state variations include:

State	Special Overtime Rules
California	Daily overtime: 1.5x for 8-12 hours, 2.0x over 12 hours; 1.5x for 1st 8 hours on 7th consecutive day, 2.0x over 8 hours on 7th day. No daily overtime exemption for most employees.
Alaska	Daily overtime at 1.5x for hours over 8 in a day when weekly hours exceed 40.
Nevada	Daily overtime at 1.5x for hours over 8 if the employee's regular rate is less than 1.5x the minimum wage ($16.50/hr in 2025).
Colorado	Daily overtime at 1.5x for hours over 12; overtime for agricultural workers after 40 hours/week or 12 hours/day.
New York	Hospital workers: overtime after 8 hours/day. Farm workers: overtime after 60 hours/week (phasing down).
Oregon	Daily overtime for certain manufacturing and mill employees after 10 hours/day.

Some states also have higher salary thresholds for exempt employees. For example, California's salary threshold is significantly higher than the federal level and adjusts annually. Washington state also has a much higher threshold that increases yearly.

How to Calculate Overtime: Step-by-Step Examples

Calculating overtime pay is straightforward once you understand the components. Here are worked examples:

Example 1: Standard Time and a Half

Scenario: You earn $22/hour, work 40 regular hours and 8 overtime hours. Your employer pays 1.5x for overtime.

1. Regular pay: 40 hours x $22 = $880.00
2. Overtime rate: $22 x 1.5 = $33.00/hour
3. Overtime pay: 8 hours x $33.00 = $264.00
4. Total gross pay: $880.00 + $264.00 = $1,144.00

Example 2: Double Time on a Holiday

Scenario: You earn $18/hour, work 40 regular hours plus 4 holiday hours at 2.0x.

1. Regular pay: 40 hours x $18 = $720.00
2. Double-time rate: $18 x 2.0 = $36.00/hour
3. Holiday pay: 4 hours x $36.00 = $144.00
4. Total gross pay: $720.00 + $144.00 = $864.00

Example 3: California Daily Overtime

Scenario: You earn $25/hour in California. In one day you work 10 hours. Total weekly hours are 42.

1. Regular pay (40 hours): 40 x $25 = $1,000.00
2. Daily overtime (2 hours at 1.5x): 2 x $37.50 = $75.00
3. Total gross pay: $1,000.00 + $75.00 = $1,075.00

Note: In California, the daily overtime applies to the day you worked 10 hours, regardless of the weekly total. The 42 weekly hours would also trigger additional weekly overtime — California applies the higher of the two calculations.

Example 4: Including a Non-Discretionary Bonus

Scenario: You earn $20/hour, work 45 hours in a week, and receive a $100 production bonus for that week.

1. Total straight-time earnings: (45 x $20) + $100 = $1,000.00
2. Regular rate: $1,000 / 45 hours = $22.22/hour
3. Overtime rate: $22.22 x 1.5 = $33.33/hour
4. Overtime pay (5 hours): 5 x $33.33 = $166.67
5. Total gross pay: $1,000.00 + $166.67 - $100 (already counted) = $1,066.67

Overtime vs. Comp Time

Comp time (compensatory time off) is time off granted in lieu of overtime pay. In the private sector, comp time is generally not permitted — the FLSA requires that non-exempt employees be paid overtime wages in cash, not time off. Public sector employers (government agencies) may offer comp time under specific rules:

• Public sector: Employees may accrue comp time at 1.5 hours per hour of overtime worked, up to a maximum of 480 hours (240 hours for certain law enforcement, fire, and emergency response personnel).
• Private sector: Comp time is prohibited for non-exempt employees. Exempt employees may receive comp time as a matter of company policy, but it is not regulated by the FLSA.
• Flex-time: Some employers offer flexible scheduling (flex-time) where employees can adjust their hours within a workweek. This is different from comp time because it does not involve carrying overtime hours across workweeks.

If you are a non-exempt employee and your employer offers "comp time" instead of overtime pay, this is likely a violation of the FLSA. Employees cannot waive their right to overtime pay, even voluntarily.

Common Overtime Mistakes and Misconceptions

• Salaried always means exempt: False. Many salaried employees earning below $684/week or whose duties do not meet the exemption criteria are still entitled to overtime.
• Overtime is calculated per pay period: False. Overtime is calculated per workweek. Hours cannot be averaged across two weeks in a bi-weekly pay period.
• Employers can require unpaid overtime: False. All overtime hours must be compensated. While employers can require overtime work, they must pay for it.
• Bonuses don't affect overtime: False. Non-discretionary bonuses must be included in the regular rate calculation, which can increase the overtime rate.
• Independent contractors get overtime: False. Independent contractors (correctly classified) are not covered by the FLSA. Misclassification is a common legal issue.

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