How to Calculate Overtime Pay (Time and a Half Formula, 2026)

If you work more than your standard scheduled hours, most employers owe you overtime pay at a higher rate than your normal wage — usually 1.5x your regular hourly rate, known as “time and a half.” This guide walks through the exact formula, a worked example, and the details that trip people up, like how overtime is taxed and when double time applies instead.

What Is Overtime Pay?

Overtime pay is extra compensation for hours worked beyond your standard workweek — typically 40 hours in the US, though this varies by country and by whether you’re classified as hourly (non-exempt) or salaried (exempt). Non-exempt hourly employees are legally entitled to overtime pay under the Fair Labor Standards Act (FLSA) in the US; salaried exempt employees usually are not, unless their employer offers it as a benefit.

The Standard Overtime Formula

The most common overtime rate is time and a half, calculated as:

Overtime Rate = Regular Hourly Rate × 1.5

Your total overtime pay for a pay period is then:

Overtime Pay = Overtime Hours × (Regular Hourly Rate × 1.5)

Step-by-Step: How to Calculate Your Overtime Pay

1. Find your regular hourly rate (annual salary ÷ 2,080 hours, if you’re salaried but eligible for overtime)
2. Count how many hours you worked beyond your standard threshold (usually 40/week)
3. Multiply your regular hourly rate by 1.5 to get your overtime rate
4. Multiply your overtime rate by the number of overtime hours worked
5. Add this to your regular pay for the standard hours to get your total gross pay

Worked Example

Say your regular hourly rate is $20, and you worked 46 hours in one week.

• Regular hours: 40 × $20 = $800
• Overtime hours: 6
• Overtime rate: $20 × 1.5 = $30/hour
• Overtime pay: 6 × $30 = $180
• Total gross pay for the week: $800 + $180 = $980

Double Time vs. Time and a Half

Some employers or state laws (California, for example) require double time — 2x your regular rate — for hours worked beyond a certain daily threshold (often 12 hours in a single day) or on the seventh consecutive day of work in a week. Double time is less common nationally but can significantly change your total pay, so check your state’s labor laws or your employment contract if you regularly work long single shifts.

Is Overtime Pay Taxed Differently?

No — overtime pay is taxed at the same rate as your regular income; there is no separate “overtime tax rate.” It can, however, push part of your income into a higher tax bracket for that pay period, which is why an overtime-heavy paycheck sometimes has a larger percentage withheld than usual. Over the full year, this typically balances out when you file your return.

Common Mistakes When Calculating Overtime

• Using take-home pay instead of gross hourly rate — overtime is calculated on your pre-tax rate, not your net pay
• Forgetting bonuses or commissions — some non-discretionary bonuses must legally be factored into your regular rate before calculating overtime
• Assuming salaried always means no overtime — salary alone doesn’t make you exempt; your job duties and pay threshold determine that
• Mixing up weekly and daily overtime rules — most US states use a weekly 40-hour threshold, but a few calculate overtime daily as well

Related Tools

Once you know your overtime pay, you can work out what actually lands in your bank account after tax using our UK Take-Home Pay Calculator, or check how overtime specifically affects your tax bill with our Overtime Tax Deduction guide.

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