Overtime pay is one of the most misunderstood parts of an hourly paycheck. This guide explains exactly how overtime is calculated under U.S. federal law, walks through real examples, and shows where state rules change the math.
The basic overtime rule under the FLSA
The federal Fair Labor Standards Act (FLSA) requires that covered, non-exempt employees be paid at least 1.5 times their regular rate of pay for every hour worked over 40 in a single workweek. This higher rate is what people mean by "time and a half."
A workweek is any fixed, recurring period of 168 hours — seven consecutive 24-hour days. It does not have to match the calendar week or your pay period. Overtime is calculated one workweek at a time and cannot be averaged across two weeks, even if you are paid every two weeks.
The overtime formula
Once you know your regular hourly rate and total hours for the week, the math is straightforward:
- Regular pay = regular rate × hours up to 40
- Overtime pay = regular rate × 1.5 × hours over 40
- Gross pay = regular pay + overtime pay
Worked example
Suppose you earn $18.00/hour and worked 46 hours this week. You have 40 regular hours and 6 overtime hours:
- Regular pay: 40 × $18.00 = $720.00
- Overtime rate: $18.00 × 1.5 = $27.00/hour
- Overtime pay: 6 × $27.00 = $162.00
- Gross pay: $720.00 + $162.00 = $882.00
What counts as your "regular rate"?
Your regular rate is not always just your base hourly wage. Under the FLSA, it must include most forms of compensation earned during the week — such as non-discretionary bonuses, shift differentials, and commissions — divided across the hours you worked. Truly discretionary bonuses, gifts, and paid-time-off hours are generally excluded.
For most straightforward hourly jobs with no extra pay, the regular rate simply equals your hourly wage, which keeps the calculation simple.
States with daily overtime rules
Federal law only requires overtime after 40 hours in a week. Several states go further and require daily overtime, meaning you can earn overtime even in a week with fewer than 40 total hours.
Examples of stricter state overtime rules
| State | Daily overtime (1.5×) | Double-time (2×) |
|---|---|---|
| California | After 8 hours/day | After 12 hours/day |
| Alaska | After 8 hours/day | — |
| Nevada | After 8 hours/day (below 1.5× min wage) | — |
| Colorado | After 12 hours/day | — |
When state and federal rules differ, employees are entitled to whichever calculation results in greater pay. For a state-aware calculation, choose your state on the state time card calculators or read our California overtime example below.
Who is eligible for overtime?
Overtime protections apply to "non-exempt" employees. Many salaried workers in executive, administrative, and professional roles are "exempt" if they meet specific duties tests and earn above a salary threshold. Job title alone does not decide exemption — the actual duties and pay structure do.
Common overtime mistakes to watch for
- Averaging hours across two weeks of a biweekly pay period (not allowed).
- Paying overtime only on the base rate when bonuses should raise the regular rate.
- Treating paid holidays or PTO hours as "hours worked" that count toward the 40-hour threshold.
- Assuming salaried automatically means exempt from overtime.
Frequently Asked Questions
How do I calculate time and a half?
Multiply your regular hourly rate by 1.5 to get your overtime rate, then multiply that by the number of hours you worked over 40 in the week. For example, at $18/hour your overtime rate is $27/hour.
Is overtime calculated daily or weekly?
Under federal law, overtime is based on hours over 40 in a workweek. Some states — like California and Alaska — also require daily overtime after 8 hours in a single day.
Do paid holidays count toward overtime?
Generally no. The FLSA only requires overtime for hours actually worked. Paid holidays, vacation, and sick time usually do not count toward the 40-hour weekly threshold unless your employer's policy says otherwise.
Can my employer average my hours across two weeks?
No. Even on a biweekly pay schedule, overtime must be calculated separately for each workweek. Hours cannot be averaged to avoid paying overtime.
Related tools & guides
This guide is for general informational purposes only and is not legal, tax, or financial advice. Labor laws vary by state and change over time. Confirm your specific situation with your employer, HR department, or the U.S. Department of Labor.