How to Calculate Overtime Pay: Formula & Examples

Disclaimer: Informational only, not tax, legal, or financial advice. Rules and rates can change; check current IRS/DOL/state guidance or consult a professional.

Overtime math looks simple until a bonus or a salary shows up. This guide walks through the actual arithmetic, step by step, with cent-precise examples you can copy with your own numbers. The focus is the formula and how to run it correctly, not a tour of every state rule.

The Overtime Pay Formula (The 30-Second Version)

Most weeks, the core formula is all you need.

Under the federal Fair Labor Standards Act (FLSA), covered non-exempt employees earn at least 1.5 times their regular rate for every hour worked over 40 in a single workweek. That is the federal trigger. There is no federal requirement for daily overtime, weekend pay, or holiday pay by itself.

Say you earn $20 an hour and work 45 hours in one week. Your regular rate is $20, and you have 5 overtime hours.

• Overtime premium pay: $20 × 1.5 × 5 = $150
• Regular pay: 40 × $20 = $800
• Gross for the week: $800 + $150 = $950

That is the whole idea. The complications come from two places: figuring out the right regular rate, and counting overtime hours per workweek instead of per paycheck. The next three steps handle both.

Step 1: Find Your Regular Rate of Pay

The regular rate is the foundation, and it trips up more people than the multiplier ever does. Plenty of guides treat “regular rate” and “hourly wage” as the same thing. Usually they are. Not always, though.

Per the FLSA, the regular rate is an hourly figure:

If you are paid a flat hourly wage with nothing else, your regular rate equals your wage. But add a production bonus, a shift differential, or a commission, and the regular rate climbs above the stated wage. Overtime is always computed on the regular rate, so a higher regular rate means a higher overtime premium.

Statutory exclusions are specific things the law lets you leave out, such as discretionary bonuses, gifts, and paid time off for hours not worked. Most everyday earnings stay in.

Salaried non-exempt workers

A weekly salary still has a regular rate hiding inside it. Divide the salary by the number of hours it is intended to cover.

If you earn a $760 salary meant to cover a 40-hour week, your regular rate is $760 ÷ 40 = $19 per hour. Work 44 hours and the 4 overtime hours are worth $19 × 1.5 = $28.50 each. Salaried does not mean exempt from overtime; non-exempt salaried employees are owed it just like hourly workers.

Step 2: Identify Overtime Hours (The 40-Hour Workweek Rule)

Overtime is counted per workweek. A workweek is a fixed, regularly recurring period of 168 hours, which is seven consecutive 24-hour periods. It can start on any day and at any hour, and it does not have to match the calendar week or your pay period.

This is the part that quietly costs people money. Overtime is never figured by adding up a whole biweekly or semimonthly pay period and checking the total against 40. Each workweek stands on its own.

Picture a biweekly paycheck covering two weeks: 45 hours, then 35 hours. The total is 80 hours, which might look like zero overtime. It is not.

• Week 1: 45 hours = 40 regular + 5 overtime
• Week 2: 35 hours = 35 regular + 0 overtime
• Overtime owed: 5 hours, from week 1 alone

Averaging the two weeks to “40 per week” would erase 5 hours of overtime. If your paycheck spans more than one week, split it into workweeks first, then apply the formula to each.

Some states stack a daily overtime rule on top of the federal weekly one, and California is the well-known example. We cover state rules separately, so for this guide, assume the federal weekly threshold. For more on how state thresholds interact with weekly overtime, see our guide on converting work hours to take-home pay.

Step 3: Apply the Multiplier and Add It Up

Once you have the regular rate and the overtime hours, you finish the math. There are two equivalent ways to do it. They always produce the same gross, and seeing both makes the bonus math in the next section click.

Say you worked 46 hours at a $24 regular rate.

Method A: 1.5x on overtime hours

• Regular pay: 40 × $24 = $960.00
• Overtime pay: 6 × ($24 × 1.5) = 6 × $36 = $216.00
• Gross: $960.00 + $216.00 = $1,176.00

Method B: straight time on all hours, plus a 0.5x premium

• Straight-time pay (all hours): 46 × $24 = $1,104.00
• Half-time premium (overtime hours): 6 × ($24 × 0.5) = 6 × $12 = $72.00
• Gross: $1,104.00 + $72.00 = $1,176.00

Same answer, $1,176.00. Method A is easier in your head. Method B is how payroll handles bonuses: once you have paid straight time on every hour, you only owe the extra “half” on the overtime hours. That is exactly the move the next section needs.

How Bonuses Change the Math

A bonus can quietly raise what you are owed in overtime, and this is where most consumer guides go silent. The key split is discretionary versus nondiscretionary.

• Nondiscretionary bonuses are promised in advance or tied to a formula: production, attendance, safety, hitting a quota. These must be folded into the regular rate.
• Discretionary bonuses are decided purely at the employer’s whim, with no advance expectation. These are excluded from the regular rate.

When a nondiscretionary bonus lands in a week with overtime, you cannot just pay the bonus and move on. The bonus lifts the regular rate, which means a little more overtime is owed. The half-time premium method (Method B above) makes this clean.

Worked example: hourly wage plus a production bonus

You earn $16 an hour, work 44 hours in the week, and earn a $100 production bonus.

1. Straight-time pay: 44 × $16 = $704.00
2. Add the bonus: $704.00 + $100.00 = $804.00 total compensation
3. Recompute the regular rate: $804.00 ÷ 44 hours = $18.27 per hour
4. Half-time premium: $18.27 × 0.5 = $9.14 per overtime hour
5. Premium on overtime hours: $9.14 × 4 = $36.56
6. Total gross: $804.00 + $36.56 = $840.56

Notice the regular rate rose from $16 to $18.27 purely because the bonus is baked in. Skip that step and the worker is shorted $36.56 of overtime premium for the week. This is the single most common place overtime gets underpaid.

Worked Examples: Three Real Scenarios

These use 2026 figures. The math is what matters; your actual paycheck depends on your state, filing status, and deductions.

Example 1: Plain hourly worker

Example 2: Salaried non-exempt worker

Example 3: Hourly plus a nondiscretionary bonus

Running these by hand once is a good way to understand the mechanics. Running them every week is tedious and easy to fumble, especially with bonuses and split workweeks. That is exactly what ClockWage44 does on your phone: log shifts across as many jobs as you want, pick an overtime mode (Off, Daily, Weekly, or Manual) and multiplier, and the on-device paycheck engine applies the same regular-rate math to the cent, then resolves taxes and deductions into a take-home figure. To check a single week fast, the free overtime calculator handles steps one through three for you.

A quick 2026 tax note

Withholding on overtime works the same as on regular wages; overtime is not taxed at a special higher rate. For tax year 2026, under the One Big Beautiful Bill, eligible workers may deduct the “half” (premium) portion of FLSA time-and-a-half at filing, up to $12,500 ($25,000 for joint filers), phasing out above $150,000 in modified adjusted gross income ($300,000 joint). That is a filing-season deduction, not a change to the overtime calculation itself. Check current IRS guidance for the details.

Frequently Asked Questions

What is the formula for calculating overtime pay?

Overtime pay = regular rate of pay × 1.5 × overtime hours. Overtime hours are the hours worked over 40 in a single workweek. The regular rate is your total weekly pay, minus statutory exclusions, divided by total hours worked, which is not always the same as your stated hourly wage.

How do I calculate overtime for a salaried non-exempt employee?

Divide the weekly salary by the number of hours it is meant to cover to get the regular rate of pay, then apply the 1.5x multiplier to the overtime hours. For example, a $760 weekly salary meant to cover 40 hours produces a $19 regular rate, so each overtime hour is worth $28.50.

Is overtime calculated weekly or per pay period?

Weekly. Each fixed workweek stands alone, even on a biweekly or semimonthly paycheck. A week with 45 hours earns 5 hours of overtime even if the next week is only 35 hours. Adding two weeks together before checking the 40-hour threshold is one of the most common ways overtime gets miscalculated.

Do bonuses affect overtime pay?

Nondiscretionary bonuses (production, attendance, safety, or any bonus tied to a formula or promised in advance) must be added into the regular rate before computing overtime. Discretionary bonuses, given purely at the employer’s choosing with no expectation, are excluded from the regular rate.

What is the difference between regular rate and hourly wage?

Your hourly wage is the stated rate on your paycheck. The regular rate is total weekly pay (minus statutory exclusions) divided by hours worked, which can exceed the stated wage once nondiscretionary bonuses or commissions are included. Overtime is always figured on the regular rate, not the bare hourly wage.

Does the FLSA require overtime for working more than 8 hours in a day?

No. Under federal law, the trigger is over 40 hours in a workweek, not hours over 8 in a day. Daily overtime is a state-law rule. California, for example, requires overtime after 8 hours in a day and double-time after 12 hours.

How much is time and a half on $20 an hour?

$30 per overtime hour. Multiply the regular rate by 1.5, so $20 × 1.5 = $30. If you worked 5 overtime hours, that is 5 × $30 = $150 in overtime pay on top of your regular pay.

Related Reading

• Overtime Pay Calculator — Enter your rate and hours to see regular pay, overtime premium, and weekly gross.
• Convert Work Hours to Take-Home Pay — From clock-in times to a net paycheck estimate.
• All ClockWage44 Tools — Free calculators for hours, overtime, and take-home pay.

References

1. DOL Fact Sheet #23 — Overtime Pay Requirements of the FLSA — The 1.5x rate and 40-hour weekly threshold.
2. DOL Fact Sheet #56A — Regular Rate of Pay — How the regular rate is defined and what it includes.
3. DOL Fact Sheet #56C — Bonuses Under the FLSA — Nondiscretionary versus discretionary bonuses in the regular rate.
4. IRS — Deduction for Qualified Overtime Compensation — 2026 filing-season deduction for the overtime premium portion.

Frequently Asked Questions

What is the formula for calculating overtime pay?

Overtime pay = regular rate of pay × 1.5 × overtime hours. Overtime hours are the hours worked over 40 in a single workweek. The regular rate is your total weekly pay, minus statutory exclusions, divided by total hours worked, which is not always the same as your stated hourly wage.

How do I calculate overtime for a salaried non-exempt employee?

Divide the weekly salary by the number of hours it is meant to cover to get the regular rate of pay, then apply the 1.5x multiplier to the overtime hours. For example, a $760 weekly salary meant to cover 40 hours produces a $19 regular rate, so each overtime hour is worth $28.50.

Is overtime calculated weekly or per pay period?

Weekly. Each fixed workweek stands alone, even on a biweekly or semimonthly paycheck. A week with 45 hours earns 5 hours of overtime even if the next week is only 35 hours. Adding two weeks together before checking the 40-hour threshold is one of the most common ways overtime gets miscalculated.

Do bonuses affect overtime pay?

Nondiscretionary bonuses (production, attendance, safety, or any bonus tied to a formula or promised in advance) must be added into the regular rate before computing overtime. Discretionary bonuses, given purely at the employer's choosing with no expectation, are excluded from the regular rate.

What is the difference between regular rate and hourly wage?

Your hourly wage is the stated rate on your paycheck. The regular rate is total weekly pay (minus statutory exclusions) divided by hours worked, which can exceed the stated wage once nondiscretionary bonuses or commissions are included. Overtime is always figured on the regular rate, not the bare hourly wage.

Does the FLSA require overtime for working more than 8 hours in a day?

No. Under federal law, the trigger is over 40 hours in a workweek, not hours over 8 in a day. Daily overtime is a state-law rule. California, for example, requires overtime after 8 hours in a day and double-time after 12 hours.

How much is time and a half on $20 an hour?

$30 per overtime hour. Multiply the regular rate by 1.5, so $20 × 1.5 = $30. If you worked 5 overtime hours, that is 5 × $30 = $150 in overtime pay on top of your regular pay.