How Overtime Pay Is Calculated

If you’ve ever looked at a paycheck after a long week and wondered whether the overtime line is right, the math behind it is more consistent than it looks. It just has a few moving parts: your regular rate, the hours over the threshold, and a multiplier.

The federal baseline

Under the Fair Labor Standards Act (FLSA), most hourly (non-exempt) employees in the US are entitled to 1.5× their regular hourly rate for every hour worked beyond 40 in a single workweek. There’s no federal requirement for daily overtime; it’s a weekly total, not a per-shift one.

Some states go further. California, for example, requires overtime after 8 hours in a single day as well as after 40 in a week, and daily double time after 12 hours. Always check your state’s rules in addition to the federal floor.

The formula

Regular Pay   = Regular Hours × Hourly Rate
Overtime Pay  = Overtime Hours × Hourly Rate × Multiplier
Total Pay     = Regular Pay + Overtime Pay

The multiplier is usually 1.5 (time and a half). Some employers and union contracts pay 2× (double time) for hours beyond a second, higher threshold, or for holiday and seventh-consecutive-day work.

Worked example

Say you worked 45 hours this week at $25/hour, with a standard 1.5× multiplier:

• Regular pay: 40 hrs × $25 = $1,000.00
• Overtime pay: 5 hrs × $25 × 1.5 = $187.50
• Total pay: $1,187.50

Bump the multiplier to 2× (double time) instead, and the overtime portion alone becomes $250, a $62.50 difference from a single field change. That sensitivity is exactly why it’s worth double-checking the number rather than eyeballing it.

A note on exempt employees

Salaried employees classified as “exempt” under the FLSA generally aren’t entitled to overtime pay regardless of hours worked, based on their job duties and salary level. If you’re not sure whether you’re exempt or non-exempt, that classification, not the hours math, is usually the first thing to verify.

FAQ

Does overtime apply to salaried employees? Only if they’re classified as non-exempt. Exempt salaried employees are generally not entitled to overtime under federal law.

Can my employer average my hours across two weeks instead of paying weekly overtime? No, under the FLSA, overtime is calculated on a single, fixed workweek. Averaging two weeks together to avoid paying overtime isn’t compliant.

What if I work overtime across two different pay rates in the same week? The regular rate for overtime purposes is generally a weighted average of all rates paid that week, not just your primary rate. That calculation gets more involved; this article covers the standard single-rate case.

Use the Overtime Calculator to run your own numbers.