How Is Overtime Calculated?

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Quick answer: How is overtime calculated? Under federal law, overtime is calculated at 1.5× your “regular rate of pay” for every hour worked over 40 in a single workweek. Work 47 hours at $22/hour and you earn 40 × $22 plus 7 × $33 = $1,111. A few states add daily overtime rules on top.

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What Is the Federal Overtime Rule?

FLSA requires 1.5× regular rate for hours over 40/week for non-exempt employees. Key definitions: non-exempt (most hourly; exempt needs $684/week salary + duties test); regular rate (total straight-time earnings ÷ hours — includes bonuses/differentials); workweek (fixed 7-day period, no averaging across weeks).

How Do You Calculate Overtime Pay? (The Exact Steps)

  1. Total hours for the workweek.
  2. Split: first 40 regular, rest overtime.
  3. Regular rate = straight-time pay ÷ hours.
  4. Regular × rate + overtime × rate × 1.5.
  5. Add together.

Formula: Gross = (40 × R) + ((H−40) × R × 1.5).

Worked Example: Maria’s 47-Hour Week

Maria, 29, works retail in Houston at $22/hour. One week she works 47 hours. Here’s the math:

Regular40 × $22$880.00
Overtime7 × $33$231.00
Total47$1,111.00

Plug your own hours into the time

Which States Have Daily Overtime?

Federalnone; 1.5× over 40/week
California1.5× over 8/day, 2× over 12/day, 7th day rules
Alaska1.5× over 8/day
Colorado1.5× over 12/day
Nevada1.5× over 8/day if under 1.5× min wage
Texas + 40 othersfederal only

Is Overtime Taxed at a Higher Rate? (Myth-Bust)

No — overtime is taxed at your normal marginal rate, not a higher one. Withholding tables just assume you earn that amount every pay period, which is why your paycheck looks smaller than expected. 2026 twist: the overtime premium (0.5×) is deductible up to $12,500 single / $25,000 joint for 2025–2028; only FLSA weekly overtime qualifies, reported in W-2 Box 12 code TT from 2026.

What Doesn’t Count Toward Overtime?

PTO, unworked holiday pay, meal breaks, exempt salary, and private-sector comp time do not count toward overtime hours.

Frequently Asked Questions

Divide the weekly salary by the hours it covers (usually 40) to get the regular rate. For $800/week, that’s $20/hour, so overtime pays $30/hour (1.5× $20).

California, Alaska, Colorado (over 12 hours/day), and Nevada (over 8 hours/day if earning under 1.5× minimum wage).

In California: for hours over 12 in a single day, and for 8+ hours on the 7th consecutive day of work.

No — you claim it on your tax return (Schedule 1-A), not through withholding. It applies to 2025–2028.

No — the FLSA prohibits averaging hours across workweeks. Overtime is calculated per single 7-day workweek.

Nondiscretionary bonuses (tied to production or performance) must be included in the regular rate. Discretionary bonuses (like holiday gifts) do not.

Contact the DOL Wage and Hour Division. Misclassified workers may be owed back overtime pay.

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This guide is for educational purposes only and is not tax, financial, or legal advice.

Sources: DOL FLSA; IRS Fact Sheet FS-2026-13.

By the EasyFinanceCalc Editorial Team.