CalculateY
How to calculate overtime pay (1.5x and 2x rules)
Federal law (FLSA) requires non-exempt hourly workers to be paid 1.5 times their regular hourly rate for any hours worked beyond 40 in a single workweek. A worker earning $20 per hour who works 50 hours in a week earns $20 × 40 + $30 × 10 = $1,100. The first 40 hours pay at the regular rate; the next 10 pay at $30 per hour (1.5 × $20). This 1.5x multiplier is “time and a half” and is the federal default. Some states and contracts add daily overtime, double-time, or stricter thresholds.
\[\text{Total Pay} = (\text{Regular Hours} \times \text{Rate}) + (\text{Overtime Hours} \times \text{Rate} \times 1.5)\]The federal rule (FLSA)
The Fair Labor Standards Act sets the federal floor:
- Overtime threshold: 40 hours per workweek
- Overtime rate: 1.5 × regular rate
- Workweek: any fixed, recurring 168-hour period (7 days). Employer chooses the start day; cannot be changed to avoid overtime.
- Applies to: most hourly workers (non-exempt)
- Does not apply to: salaried exempt employees (executive, administrative, professional roles meeting both salary and duties tests)
States can require more (California, for example, requires daily overtime) but cannot require less. The FLSA is the floor.
Worked example: standard hourly worker
A construction worker earns $25/hour. In one week, they work 47 hours.
- Regular hours: 40
- Overtime hours: 7
- Regular pay: 40 × $25 = $1,000
- Overtime rate: $25 × 1.5 = $37.50
- Overtime pay: 7 × $37.50 = $262.50
- Total weekly pay: $1,262.50
Effective hourly rate for the week: $1,262.50 / 47 = $26.86. The 7 overtime hours raised the average pay rate by $1.86/hour.
Daily overtime (California rule)
California (and a few other states/employers by contract) requires overtime on a daily basis as well as weekly:
- 1.5x for hours 8-12 in a single day
- 2x for hours over 12 in a single day
- 2x for hours over 8 on the seventh consecutive workday
For a worker earning $25/hour working a 12-hour shift on Monday and 8-hour shifts Tuesday-Friday:
- Monday: 8 hours regular + 4 hours at 1.5x = 8 × $25 + 4 × $37.50 = $200 + $150 = $350
- Tue-Fri: 32 hours regular = 32 × $25 = $800
- Weekly total: $1,150
Federal rule alone (no daily): 40 hours regular + 0 hours overtime = $1,000
The California daily rule produces $150 more for the same hours worked.
Double-time (2x) overtime
Double-time triggers under specific conditions:
- California: hours over 12 in a single day
- California: hours over 8 on the seventh consecutive workday
- Some union contracts: hours on Sunday or holidays
- Some employers voluntarily: hours over a certain weekly threshold (e.g., 60+)
For a worker earning $25/hour working a 14-hour day:
- Hours 0-8: regular ($25/hr) = $200
- Hours 8-12: time-and-a-half ($37.50/hr) = $150
- Hours 12-14: double-time ($50/hr) = $100
- Day total: $450
Federal rule alone for the same day: $25 × 14 = $350 (no daily overtime exists at the federal level, just weekly).
Calculating the regular rate (when bonuses are involved)
The “regular rate” is more than just the hourly wage if there are non-discretionary bonuses, shift differentials, or piece-rate pay. The FLSA requires recalculating the regular rate to include these:
\[\text{Regular Rate} = \frac{\text{Total Weekly Earnings (excluding overtime premium)}}{\text{Total Hours Worked}}\]For a worker earning $20/hour plus a $100 production bonus, working 50 hours:
- Base: 50 × $20 = $1,000
- Bonus: $100
- Total earnings: $1,100
- Regular rate: $1,100 / 50 = $22/hour
- Overtime premium owed: 10 × $22 × 0.5 = $110 (the 0.5 is the additional half-time owed because the $22 was already paid for all hours)
- Total weekly pay: $1,100 + $110 = $1,210
Without the regular rate adjustment, the worker would have been underpaid by $20 in overtime premium.
Tipped workers
Tipped workers (federal minimum cash wage $2.13, plus tips that bring them to at least $7.25) get overtime calculated on the full minimum wage rate, not the cash wage. For a tipped worker working 50 hours at the federal minimum:
- Regular rate: $7.25 (minimum wage, not $2.13)
- Overtime rate: $7.25 × 1.5 = $10.88
- Cash wages owed: 40 × $2.13 + 10 × ($10.88 - $5.12 tip credit) = $85.20 + $57.60 = $142.80
This is one of the most commonly miscalculated payroll items. The tip credit applies to the cash wage paid by the employer, but the overtime premium is calculated against the full minimum wage, not the discounted tipped rate.
Salaried non-exempt employees
Some salaried workers are still entitled to overtime if they don’t meet the FLSA exemption tests. The salary is converted to an hourly rate first:
\[\text{Hourly Rate} = \frac{\text{Weekly Salary}}{\text{Hours Salary Is Intended to Cover}}\]For a salaried non-exempt worker earning $800/week intended to cover 40 hours:
- Hourly rate: $800 / 40 = $20
- Overtime: hours over 40 paid at 1.5 × $20 = $30/hr
If the same $800 salary is intended to cover 45 hours (a “fluctuating workweek” arrangement):
- Hourly rate for that week: $800 / 45 = $17.78
- Overtime premium: hours 41-45 at 0.5 × $17.78 = $8.89 each (the salary already covers the regular rate for all hours)
Fluctuating workweek arrangements have specific FLSA requirements; not all employers can use them.
Common mistakes
Treating “comp time” as legal substitute. Private-sector employers cannot give time off in lieu of overtime pay. Public-sector employers can in some cases, but with strict rules. Banking comp time instead of paying overtime is illegal in the private sector.
Using the wrong workweek. The workweek must be a fixed, recurring 168-hour period. Some employers shift the workweek to spread hours and avoid overtime; this is illegal.
Forgetting bonuses in the regular rate. Production bonuses, attendance bonuses, and shift differentials all increase the regular rate for overtime calculation purposes.
Misclassifying employees as exempt. Salary alone does not make someone exempt. The job duties must also meet specific tests (executive, administrative, professional, computer, outside sales). The federal salary threshold is currently $35,568/year; below this, employees are non-exempt regardless of duties.
Averaging hours across multiple weeks. Each workweek stands alone for overtime purposes. A worker who works 30 hours one week and 50 the next is owed 10 hours of overtime for the second week, even though the average is 40.
Quick reference
For a $25/hour worker:
| Hours worked | Regular pay | OT pay | Total |
|---|---|---|---|
| 40 | $1,000 | $0 | $1,000 |
| 45 | $1,000 | $187.50 | $1,187.50 |
| 48 | $1,000 | $300 | $1,300 |
| 50 | $1,000 | $375 | $1,375 |
| 55 | $1,000 | $562.50 | $1,562.50 |
| 60 | $1,000 | $750 | $1,750 |
For each additional hour beyond 40, gross weekly pay increases by 1.5 × hourly rate.
The overtime pay calculator handles regular and overtime hours with custom multipliers (1.5x, 2x, or other contract rates). Pair with the paycheck calculator to convert gross to net after taxes.