How to Calculate Overtime Pay
Overtime pay is additional compensation required when an employee works more hours than a specified threshold. Under federal law, the standard rate is 1.5× regular pay — but the rules vary by state and employment type.
The Federal FLSA Standard
The Fair Labor Standards Act (FLSA) requires non-exempt employees to receive overtime pay at 1.5× their regular rate for all hours worked beyond 40 in a single workweek. The workweek is a fixed, recurring 168-hour period — it is not averaged across a pay period.
Formula
Regular Hours = min(Hours Worked, 40)
Overtime Hours = max(Hours Worked − 40, 0)
Overtime Rate = Hourly Rate × 1.5
Regular Pay = Regular Hours × Hourly Rate
Overtime Pay = Overtime Hours × Overtime Rate
Gross Pay = Regular Pay + Overtime Pay
Worked Example
Employee earns $20/hr and works 47 hours in a week:
- Regular hours: 40h × $20 = $800.00
- Overtime hours: 7h × $30 (1.5 × $20) = $210.00
- Gross weekly pay: $1,010.00
Use the Overtime Pay Calculator to run these numbers automatically.
State Overtime Rules
Federal law sets a floor — states can require more overtime pay but not less. Several states apply daily overtime rules in addition to the weekly threshold:
- California: Overtime after 8 hours in a day (1.5×) and after 12 hours (2×). Also applies after the first 8 hours on the 7th consecutive workday.
- Alaska: Daily overtime after 8 hours, in addition to the weekly threshold.
- Nevada: Daily overtime after 8 hours for employees earning less than 1.5× minimum wage.
- Other states: Most follow the federal 40-hour weekly standard only. Check your state labor board for current rules.
Who Qualifies for Overtime?
FLSA overtime applies to non-exempt employees. Exempt employees — generally those who meet certain salary level and job duties tests — are not entitled to overtime under federal law. Common exempt categories include:
- Executive, administrative, and professional employees earning above the current Department of Labor salary threshold — check dol.gov for the current figure, as it is subject to change
- Outside sales employees
- Certain computer professionals
- Highly compensated employees
Note: Salary alone does not determine exemption — job duties also matter. Consult an HR professional or employment attorney for classification questions.
Common Questions
Does overtime reset every week or every pay period?
Every workweek. Even if you're paid biweekly, overtime is calculated per 7-day workweek — hours cannot be averaged across two weeks.
What if I work two jobs for the same employer?
Hours from different positions with the same employer are combined for FLSA overtime purposes. Hours from separate employers are not.
Last reviewed: August 2026
This guide is for general information only. It is not legal or payroll advice. Rules vary by state, industry, and individual employment situation.