How to calculate overtime pay, with worked examples

By Admin · Published 10 October 2026

Overtime pay comes down to three questions: which hours count as overtime, what rate they are paid at, and what period the limit applies to. Get the period wrong and you can underpay someone while adding every hour correctly. This guide works through the United States federal rule and California's daily rule, because both are published in plain terms, and shows how to check a week with the work hours calculator.

What time and a half and double time mean

Time and a half means an overtime hour is paid at 1.5 times the regular hourly rate: on $20 an hour, $30. Double time means 2 times the rate, so $40. The higher rate applies only to the overtime hours, never the whole week. Time and a half can also be seen as regular pay for the hour plus a premium of half the rate: $20 plus $10.

The US federal rule: overtime after 40 hours in a workweek

The Department of Labor's Fact Sheet #23 sets out the federal rule under the Fair Labor Standards Act. Unless specifically exempted, employees covered by the Act must receive overtime pay for hours worked in excess of 40 in a workweek, at not less than time and one-half their regular rate of pay. The Act does not require overtime pay for work on Saturdays, Sundays, holidays or regular days of rest as such, and sets no limit on the hours an employee aged 16 or older may work.

The workweek is the unit everything is measured in: a fixed and regularly recurring period of 168 hours, seven consecutive 24-hour periods. It need not match the calendar week and may begin on any day and hour, but once set it stays fixed, and averaging of hours over two or more weeks is not permitted.

The regular rate is not always the headline hourly figure. The fact sheet says it includes all remuneration for employment except payments the Act itself excludes, such as reimbursed expenses, the overtime premiums themselves, true premiums for weekend and holiday work, discretionary bonuses, gifts, and pay for vacation, holidays or illness. It cannot be less than the minimum wage.

Worked example: 46 hours at $20 an hour

Regular hours are the first 40. Overtime is the 6 hours beyond them.

• Regular pay: 40 hours times $20 = $800.
• Overtime rate: $20 times 1.5 = $30.
• Overtime pay: 6 hours times $30 = $180.
• Gross pay for the week: $800 + $180 = $980.

Paying all 46 hours at $20, which is $920, then adding the half-rate premium of $10 on each of the 6 overtime hours, $60, gives the same $980. That second route is the one to use when the regular rate comes from a salary or mixed rates, as below.

California adds a daily limit and a seventh-day rule

Some states add rules of their own. California's Labor Commissioner publishes an overtime FAQ stating that a nonexempt employee aged 18 or over is owed one and one-half times the regular rate for all hours worked over eight up to and including 12 in any workday, and for the first eight hours on the seventh consecutive day of work in a workweek, and double the regular rate for hours over 12 in a workday and over eight on the seventh consecutive day. The weekly limit of 40 hours applies as well, and the page notes that exemptions and exceptions exist.

A 13 hour day at $20 under those rules:

• Hours 1 to 8 at the regular rate: 8 times $20 = $160.
• Hours 9 to 12 at time and a half: 4 times $30 = $120.
• Hour 13 at double time: 1 times $40 = $40.
• Pay for the day: $160 + $120 + $40 = $320, against $260 at a flat rate.

When a daily rule and a weekly rule both apply, count the daily overtime first and take those hours out of the weekly total, so no hour is paid twice. The calculator does that when you set both limits. It applies one multiplier, so for a California day past 12 hours, work the double time hour out separately.

Biweekly pay: never average the two weeks

Suppose someone works 44 hours in the first week of a two-week pay period and 36 in the second. The total is 80, which looks like two normal weeks. It is not: week one has 4 hours over 40, and week two cannot cancel them, because averaging across weeks is not allowed. At $20 an hour the period pays 76 regular hours, $1,520, plus 4 overtime hours at $30, $120, which is $1,640. Treating it as 80 flat hours pays $1,600 and underpays by $40. Add each week up separately, as the hours worked guide explains, and apply the limit to each.

Salaries and mixed rates

Fact Sheet #23 gives a salary example that catches employers out. An employee hired for a 45 hour week at $405 has a regular rate of $405 divided by 45, which is $9.00. The salary already covers straight time for all 45 hours, so what is still owed is the half-rate premium on the 5 overtime hours: $4.50 times 5 = $22.50. Where someone works at two or more rates in one week, the fact sheet says the regular rate is the weighted average: all the earnings divided by all the hours.

Two more points from the same source: a fixed lump sum for overtime, paid regardless of the hours, does not count as an overtime premium, and the requirement cannot be waived by agreement. An announcement that overtime is not permitted or will not be paid unless authorised does not remove the right to pay for overtime hours actually worked.

Exempt or non-exempt

The federal rule applies to employees who are covered by the Act and not exempt. Whether a job is exempt depends on duties, how the person is paid and the salary level, and it is not something a guide should decide for you. The Department of Labor publishes fact sheets on the executive, administrative, professional, computer and outside sales exemptions, and its Wage and Hour Division answers questions directly. Start there, or with your state's labour department.

Rules differ, and this is not legal advice

Everything above describes two published rule sets. Other countries set different thresholds or none, other states add their own rules, and a contract or collective agreement can promise more than the law requires. This guide explains the arithmetic; it is not legal advice. For your own pay, read the rule that applies where you work and ask the authority that enforces it. To check a week, enter each day in the work hours calculator with the weekly limit, a daily limit if your rules have one, the rate and the multiplier; it shows regular hours, overtime hours and gross pay.

More guides

• How to run an icebreaker that people actually enjoyPicking the question, setting the tone and keeping it short, for meetings, classes and workshops.
• How to split a group into fair teamsTeam sizes, odd numbers, mixing people up and keeping the process open, for classes, workshops and events.
• How to cut meeting costs and keep the useful meetingsMeasure what meetings cost, then trim invite lists, shorten defaults and review the recurring ones.
• How to calculate hours worked, with breaks and decimalsSubtracting breaks, handling night shifts, turning minutes into decimals and adding a week up without the usual slips.
• How to organise a Secret Santa at work without emailA timeline that works, a budget people can live with, rules worth sending, remote teams, dropouts and keeping it voluntary.
• How to split expenses with friends and settle up fairlyAgree the method, keep one list, work out net balances with a full example and settle up in the fewest payments.
• What a salary is per hour: the 2,080 hour ruleDividing a salary by the hours it covers, where 2,080 and 2,087 come from, shorter weeks, unpaid leave and the reasons two answers differ.