How to Calculate Overtime Pay: Formula and Examples

To calculate overtime pay in the United States, find your regular hourly rate, multiply it by 1.5, and multiply that by the hours you worked beyond 40 in the workweek. Add the result to your regular pay for the first 40 hours. The federal rule says covered, nonexempt employees must receive at least 1.5 times their regular rate for hours over 40 in a workweek.

The formula is short. The details are where people go wrong: what counts as the “regular rate,” how salaried workers convert to hourly, and what to do with bonuses. This guide walks through each case with figures you can check by hand, then closes with a quick method for calculating tips, since the two tasks often sit next to each other on payday.

TL;DR

• Overtime rate = regular hourly rate × 1.5. Overtime pay = overtime rate × hours over 40 in the workweek.
• Total weekly pay = (regular rate × 40) + (regular rate × 1.5 × overtime hours).
• The regular rate is total pay for the week (minus statutory exclusions) divided by hours worked, so nondiscretionary bonuses raise it.
• Some states, and some employees, follow different rules; check your state labor department and your exemption status.
• For tips: multiply the pre-tax bill by the percentage, then divide the total by the number of people.

Table of Contents

• The overtime formula in plain terms
• Worked example 1: hourly pay
• Worked example 2: salaried, nonexempt employees
• What counts in the regular rate
• Quick formulas to keep
• Overtime rules that change by place and job
• Common mistakes when you calculate overtime
• Doing the math with a tool
• How to calculate a tip
• FAQ
• Sources

The overtime formula in plain terms

The federal Fair Labor Standards Act (FLSA) sets overtime at time and a half. In the Department of Labor’s own wording, employees covered by the Act must receive overtime pay for hours worked over 40 in a workweek at not less than one and one-half times their regular rates of pay.

Written as steps:

1. Regular hourly rate. What you earn per hour before overtime.
2. Overtime rate. Regular rate × 1.5.
3. Overtime hours. Total hours in the workweek minus 40 (if the result is negative, there is no overtime).
4. Overtime pay. Overtime rate × overtime hours.
5. Total pay. Regular rate × 40, plus overtime pay.

The Office of Personnel Management describes the same calculation for federal employees in a slightly different form: the straight-time rate times all hours worked, plus one-half of the regular rate times the overtime hours. The two forms give identical answers, which is useful for checking your work. Paying every hour at the base rate and then adding a half-time premium on the overtime hours is the same as paying 1.5 on those hours.

A note on the workweek

The 40-hour threshold applies to a single workweek, not to a pay period. If you are paid every two weeks, you calculate each week separately. Working 30 hours one week and 50 the next does not average out to 40 and 40 under the federal rule. A fixed, recurring period of 168 hours (seven consecutive 24-hour days) is what counts as a workweek, and your employer decides when it starts.

If you track hours across two weeks, the biweekly timesheet calculator can total each week, including breaks, so you have clean weekly hours to plug into the formula.

Worked example 1: hourly pay

The Department of Labor’s Handy Reference Guide uses a simple case: an employee paid $8.00 an hour who works 44 hours in a workweek earns $320 for the first 40 hours plus $48.00 for four overtime hours (4 × $12.00), for a total of $368.00.

The same steps with a more current wage, as an illustration of our own:

These are gross figures, before income tax and other withholding. Overtime is not taxed at a special rate, but it can push a single paycheck into a larger withholding amount, which is why take-home pay on an overtime week can look smaller than expected. A paycheck calculator can estimate what is left after withholding.

Worked example 2: salaried, nonexempt employees

Being paid a salary does not automatically remove overtime rights. Whether you qualify depends on your duties and pay, not on how you are paid. If you are a salaried employee classified as nonexempt, convert your salary into an hourly rate first.

Indeed’s 2026 guide gives an example for a nonexempt employee earning $31,200 a year ($600 a week) on a 40-hour week who works 55 hours: the hourly rate is $15, the time-and-a-half rate is $22.50, overtime wages are $337.50 for 15 hours, and total wages are $937.50.

Here is another illustration, with our own numbers:

• Annual salary: $52,000, on a 40-hour workweek.
• Weekly salary: $52,000 ÷ 52 = $1,000.
• Regular hourly rate: $1,000 ÷ 40 = $25.00.
• Overtime rate: $25.00 × 1.5 = $37.50.
• Hours worked: 46, so 6 overtime hours.
• Overtime pay: $37.50 × 6 = $225.00.
• Total: $1,000 + $225 = $1,225.00.

The salary-to-hourly step assumes the salary is meant to cover a 40-hour week. If your agreement says the salary covers a different number of hours, that number is the divisor, and your employer or your state labor agency can confirm how it applies. If you need to move between hourly, weekly, monthly and yearly figures, the hourly wage calculator converts an hourly rate into each pay period, and the monthly wage calculator goes from any pay to a monthly figure.

What counts in the regular rate

Most simple examples use a flat hourly wage, but the legal “regular rate” can be higher than your base wage. The Department of Labor defines it as total pay for employment in the workweek, except for statutory exclusions, divided by the hours actually worked. It includes all remuneration for employment except certain payments the Act itself excludes, such as discretionary bonuses, gifts, and payments for vacation or holidays.

In practice, the question is whether a bonus is nondiscretionary (promised or tied to a set target, such as attendance or production) or discretionary (the employer decides amount and timing at its own choice). Nondiscretionary bonuses go into the regular rate for the week they cover.

The Department of Labor’s Fact Sheet #56C shows this with a nonexempt employee paid $10.00 per hour who receives a $50.00 nondiscretionary bonus and works 43 hours. The steps, as published by the Department:

Notice the structure. Because every hour, including the overtime hours, has already been paid at the straight rate (the $430 for 43 hours), only the extra half is owed on the three overtime hours. This is the same approach you use whenever the regular rate is a blended figure rather than a stated wage.

The same logic applies to other pay structures. For piece-rate workers, the regular rate comes from dividing total weekly earnings by total hours worked, and they are then owed an additional 0.5 times that rate for each overtime hour. More generally, whether earnings are set by piece rate, salary, commission or another basis, overtime must be computed on the average hourly rate those earnings produce, and the regular rate cannot fall below the minimum wage.

Salary meant to cover all hours

A less common arrangement is the fluctuating workweek method, where a fixed salary is meant to cover all hours worked in a week, however many. Under it, overtime is paid at half the average hourly rate, found by dividing the salary by the hours actually worked, as described in Fact Sheet #82. The method has conditions that depend on your agreement and your state, so treat the example below as arithmetic only.

Illustration with our own numbers: a $800 weekly salary and 50 hours worked gives a regular rate of $800 ÷ 50 = $16.00. The half-time premium is $8.00, and 10 overtime hours add $80.00, for a total of $880.00. Note that the rate changes every week with the hours worked, which is the opposite of the 40-hour conversion used in the earlier salary example.

Quick formulas to keep

Double time is not part of the federal rule, which sets the floor at 1.5. It comes from state law, an employer’s policy or a union agreement.

Overtime rules that change by place and job

Three questions decide whether the formula above applies to you.

Are you covered and nonexempt? The federal rule applies to covered employees who are not specifically exempted. Exemptions depend on job duties and salary, and they are not set by a job title alone. The Department of Labor’s overtime page is the starting point for checking your status.

Does your state set a stricter rule? Several states have their own overtime laws. The California Department of Industrial Relations publishes its own overtime FAQ, and Washington’s Department of Labor & Industries has a page on overtime and exemptions that covers calculating overtime. When federal and state rules differ, the one more favorable to the employee generally governs, so look up your state’s labor department before you rely on a 40-hour calculation.

Are you outside the United States? The 40-hour, time-and-a-half rule is American. Singapore, for example, requires overtime pay for non-workmen earning up to $2,600 a month and workmen earning up to $4,500 a month at no less than 1.5 times the hourly basic rate, according to its Ministry of Manpower. For another example, see this overview of overtime pay in South Africa. Thresholds, multipliers and eligibility differ from country to country, so use the figures from your own jurisdiction.

Common mistakes when you calculate overtime

• Using the pay period instead of the workweek. Two weeks of 50 hours each has 20 overtime hours. One total of 100 hours in 14 days does not reduce to “20 over 80” under the federal rule if the weeks are uneven; each week stands alone.
• Applying 1.5 to the whole week. Only hours above 40 get the premium. Applying 1.5 to all 46 hours in the earlier example would overstate pay by $150.00.
• Ignoring bonuses. A nondiscretionary bonus raises the regular rate, which raises the overtime rate.
• Forgetting breaks. Hours you enter should match hours actually worked. Unpaid meal breaks are typically subtracted, and rounding on a timesheet should be consistent from day to day.
• Rounding too early. Carry the regular rate to at least four decimals while calculating and round only the final dollar amount. The Department’s own bonus example rounds the rate to $11.16 at an intermediate step, so small cents differences between calculators are normal.
• Mixing gross and net. Overtime formulas produce gross pay. Withholding comes afterward.

Doing the math with a tool

If you would rather not do the arithmetic by hand each week, GizmoBench has a set of work and money calculators, including an hours calculator, that run in your browser without an account or installation. The gross income calculator totals pay from more than one job, and the work schedule maker lays out a repeating shift calendar so you can see in advance which weeks are likely to cross 40 hours. A raise changes every figure in the overtime formula too, so the pay raise calculator shows your new pay and percent increase before you recalculate.

Whatever tool you use, keep your own record of hours. A calculator gives you an estimate to compare against your pay stub, and it is not a replacement for your employer’s payroll records or for advice from your state labor agency.

How to calculate a tip

Tips are a different kind of percentage problem, but they use the same discipline: pick the base, apply the rate, then split.

The basic method. Multiply the pre-tax bill by the tip percentage as a decimal. On a $64.00 bill:

The mental shortcut. Move the decimal one place to find 10% ($6.40). Double it for 20% ($12.80), or add half of it for 15% ($6.40 + $3.20 = $9.60).

Splitting among people. Add the tip to the bill, then divide by the number of people. With a 20% tip on the $64.00 bill and four people: $76.80 ÷ 4 = $19.20 each. If people ordered different amounts, the bill split calculator handles itemized orders, tax and tip. Which rate you choose is a matter of local custom and your own judgment, and this article does not set one.

FAQ

How do I calculate overtime if I am paid a salary?

If you are a nonexempt salaried employee, divide your annual salary by 52 and then by the hours the salary is meant to cover, usually 40, to get an hourly rate. Multiply that by 1.5, then by your overtime hours, and add it to your weekly salary. Exempt employees are not entitled to federal overtime, so check your classification first.

What is the time and a half formula?

Time and a half is the regular hourly rate multiplied by 1.5. At $18.00 an hour, the overtime rate is $27.00. Multiply that by the hours over 40 in the workweek, then add the result to your regular pay.

Does overtime apply after 8 hours a day or 40 hours a week?

The federal rule counts hours over 40 in a workweek and has no daily threshold. Some states add their own daily rules, so check your state labor department. California’s agency, for instance, publishes an overtime FAQ for its own rules.

Do bonuses change my overtime rate?

Nondiscretionary bonuses are included in the regular rate, so they raise it for the week they cover. Discretionary bonuses, gifts and certain other payments are excluded under the Act. The Department of Labor’s Fact Sheet #56A and #56C explain the categories and give a worked example.

How do I split a tip between several people?

Add the tip to the pre-tax bill, then divide the total by the number of people. For a $64.00 bill with a 20% tip shared by four, each person pays $19.20. For itemized orders, use a bill split calculator.

Sources

• Fact Sheet #23: Overtime Pay Requirements of the FLSA
• Overtime Pay, U.S. Department of Labor
• How to Compute FLSA Overtime Pay, OPM
• Handy Reference Guide to the Fair Labor Standards Act
• Fact Sheet #56A: Overview of the Regular Rate of Pay
• Fact Sheet #56C: Bonuses under the FLSA
• Fact Sheet #82: Fluctuating Workweek Method
• Time and a Half and How To Calculate It, Indeed
• Overtime, California Department of Industrial Relations
• Overtime & Exemptions, Washington Labor & Industries
• Hours of work, overtime and rest day, Singapore Ministry of Manpower

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