How Overtime Pay Is Calculated: Formula, Regular Rate, State Rules
Last updated · By the DropFlick team
Overtime pay looks simple (“time and a half”), but the details decide whether a paycheck is right: which hours count, what “regular rate” means, and which rules apply where you work. This guide walks through each step with examples.
Step 1: Find your overtime hours
Overtime hours are the hours above a threshold. Under the US federal Fair Labor Standards Act (FLSA), that is hours over 40 in a workweek for covered, non-exempt employees. A workweek is a fixed 7-day period; hours are not averaged across two weeks, even on a biweekly payroll. Some states and other countries also count daily overtime.
Total your week first with the time card calculator if you only have clock times.
Step 2: Work out the regular rate
For someone paid one hourly rate with nothing extra, the regular rate is that hourly rate. It changes when there is more than one source of pay in the week:
- Two or more hourly rates: the regular rate is the weighted average: total straight-time pay ÷ total hours (29 CFR 778.115).
- Non-discretionary bonuses (for attendance, production or meeting targets) are added to the week's earnings before dividing (29 CFR 778.209).
Step 3: Apply the overtime formula
Overtime pay = overtime hours × regular rate × 1.5
Or, if straight time for all hours is already counted (the usual method with several rates or a bonus):
Overtime premium = overtime hours × regular rate × 0.5
Example A: one rate
46 hours at $22/h: 40 × $22 = $880 regular, plus 6 × $33 = $198 overtime, which is $1,078.
Example B: two rates
30 h at $15 + 15 h at $20 = $750 for 45 hours. Regular rate = $750 ÷ 45 = $16.67. Premium = 5 × $8.33 = $41.67, so the total is $791.67. Try it in the weighted overtime calculator.
Example C: a weekly bonus
50 hours at $20/h plus a $100 production bonus = $1,100. Regular rate = $1,100 ÷ 50 = $22. Premium = 10 × $11 = $110, so the total is $1,210, not the $1,200 you'd get by ignoring the bonus.
How US federal and state rules differ
| Jurisdiction | Main overtime trigger | Notes |
|---|---|---|
| Federal (FLSA) | Over 40 h / workweek at 1.5× | No daily overtime or double time |
| California | Over 8 h / day or 40 h / week at 1.5×; over 12 h / day at 2× | 7th consecutive day: first 8 h at 1.5×, over 8 h at 2× |
| Texas, Florida | Federal rule applies | No separate state overtime law for most private employers |
| Alaska, Nevada, Colorado | Weekly rule plus daily rules with conditions | Check the state labor department |
When federal and state laws both apply, the employee gets whichever rule pays more. California's calculation is modelled in the California overtime calculator.
Outside the United States
Canada, the UK, Australia and other countries set overtime through national or provincial law, awards and contracts. The UK, for example, has no statutory overtime premium. See overtime basics by country. The general overtime calculator works with any threshold, multiplier and currency.
Is overtime taxed differently?
No. Overtime is taxed as ordinary wages. In the US, for tax years 2025–2028, eligible workers can claim a federal deduction for the FLSA-required overtime premium (up to $12,500, or $25,000 joint), subject to an income phase-out. Estimate it with the no tax on overtime calculator.
General information only, not legal or tax advice. Exempt status, industry rules and contracts can change the answer.