Overtime Pay Explained: Rates, Rules & How to Calculate

Overtime pay is the premium rate US workers earn for hours worked beyond 40 in a single workweek. Under the Fair Labor Standards Act (FLSA), the federal law setting the baseline for wages and hours, eligible employees must receive at least one and a half times their regular rate for every overtime hour.

Most hourly workers qualify, but many salaried workers are exempt, and that split between non-exempt and exempt employees is where most confusion — and most underpaid paychecks — begins. This guide explains the rates, who qualifies, how to calculate overtime pay, and how state rules can change the answer.

Quick answer: Overtime pay is 1.5× your regular hourly rate for every hour worked over 40 in a workweek, as required by the Fair Labor Standards Act (FLSA) for non-exempt employees. Example: at $20/hour, overtime pays $30/hour. Salaried employees may be exempt if they earn at least $684/week and meet the duties tests. Calculate your exact pay with our overtime pay calculator.

What Is Overtime Pay?

Overtime pay is premium pay — at least 1.5 times the regular rate of pay, often called time and a half — for hours worked beyond 40 in a workweek. The requirement comes from the FLSA, which covers most US employers and jobs, and employees cannot waive their right to overtime by private agreement.

The workweek is the key unit: a fixed, regularly recurring period of 168 hours — seven consecutive 24-hour days — set by the employer, which need not match the calendar week. Overtime is worked out week by week and cannot be averaged across weeks, so 30 hours one week plus 50 the next still earns 10 overtime hours.

How to Calculate Overtime Pay (Step by Step)

The formula has three steps. Multiply your regular hourly rate by 1.5 to get the overtime rate. Multiply that rate by the hours worked beyond 40. Then add the result to your regular pay for the first 40 hours: total gross pay = (40 × regular rate) + (overtime hours × regular rate × 1.5).

Worked example: a worker earns $18 an hour and works 46 hours in one week.

Regular pay: 40 × $18 = $720
Overtime pay: 6 × $27 = $162 — the overtime rate is $18 × 1.5 = $27
Total gross pay: $720 + $162 = $882

Second example: at $25 an hour for 50 hours, regular pay is 40 × $25 = $1,000 and overtime pay is 10 × $37.50 = $375, since $25 × 1.5 = $37.50. Total gross pay is $1,000 + $375 = $1,375. Only hours past 40 earn the premium.

Who Qualifies for Overtime — and Who Is Exempt

Non-exempt employees are covered by the FLSA overtime rule and must receive time and a half after 40 hours, whether they are paid hourly or by salary. Exempt employees have no right to overtime pay. Most hourly workers are non-exempt; the main exemptions cover executive, administrative and professional employees, called the white-collar exemptions.

Passing a white-collar exemption takes two tests. The salary test requires pay of at least $684 per week ($35,568 per year), the FLSA standard salary level, on a salary basis. The duties test examines the real job: executives must manage the business or a department and direct other employees; administrative staff must handle office work tied to general business operations, exercising discretion and independent judgment on significant matters; professionals must perform work requiring advanced knowledge in science or learning.

Job titles alone do not decide exemption. A so-called manager paid below the salary threshold, or one who mostly does the same work as hourly staff, can still be non-exempt and owed overtime for every hour past 40.

Overtime Rules That Vary by State

Federal law is a floor, not a ceiling, and some states add stricter overtime rules. California goes furthest: non-exempt workers there earn time and a half after 8 hours in a day and after 40 in a week, plus double time after 12 hours in a day. See our guide to California overtime rules for the daily thresholds and seventh-day rule.

Alaska likewise requires daily overtime after 8 hours for many employers, and Colorado requires overtime after 12 hours in a day or 12 consecutive hours, on top of the weekly 40-hour rule. Nevada requires daily overtime after 8 hours for workers earning less than 1.5 times the state minimum wage. When state and federal rules differ, the one paying the worker more generally applies.

Common Overtime Pay Mistakes

Averaging hours over two weeks. Averaging a 50-hour week with a 30-hour week across a pay period erases 10 overtime hours. The FLSA forbids this: overtime is earned in the week it is worked.

Misclassifying employees as exempt. A job title or a salary does not create an exemption. Workers paid under $684 a week, or whose duties fail the duties tests, remain non-exempt — and misclassification can mean years of back overtime pay.

Excluding bonuses from the regular rate. Non-discretionary bonuses and shift differentials usually count toward the regular rate, so basing time and a half on the bare hourly wage alone underpays every overtime hour.

Off-the-clock work. Checking messages, setting up or closing down outside recorded hours is still work time when the employer knows it happens. Those minutes can push a week past 40 hours and create unpaid overtime.

Frequently Asked Questions

Is overtime pay mandatory in the US?

Yes. For non-exempt employees, the Fair Labor Standards Act requires overtime pay at one and a half times the regular rate for every hour worked over 40 in a workweek. States can set stricter rules, but they cannot go below this federal floor for covered workers in any state.

How is overtime calculated for salaried non-exempt workers?

Start with the weekly salary and divide it by 40 to find the regular hourly rate, assuming the salary covers 40 hours. Multiply that rate by 1.5 for each hour beyond 40, then add the overtime amount to the full weekly salary for total gross pay that week.

What is the overtime rate for $20 an hour?

The overtime rate for $20 an hour is $30 an hour, because $20 multiplied by 1.5 equals $30. That premium applies to every hour worked beyond 40 in the workweek. So 10 overtime hours at that rate add $300 in overtime pay, on top of your regular weekly pay.

Does overtime have to be approved to be paid?

Yes, it still has to be paid. If an employee works overtime, the employer must pay for those hours even when the overtime was not approved in advance. The employer may discipline the employee for breaking an approval policy, but it cannot withhold the overtime wages already earned.

When is double time required?

Federal law never requires double time — the FLSA stops at time and a half after 40 hours a week. Double time, at twice the regular rate, applies only in specific cases, such as California hours over 12 in a day, or under some union contracts and employer policies.

Overtime pay rests on simple rules: time and a half past 40 hours for non-exempt workers, exemptions based on pay and duties rather than titles, and extra state rules in some states. Use the calculator above for your own numbers, and read how overtime pay is taxed to understand the take-home side.

Overtime Pay: How It Works, Who Qualifies & How to Calculate It