How to Calculate Overtime Pay in 2026 (Time and a Half Explained)
Overtime pay is 1.5 times your regular rate for every hour past 40 in a week — simple formula, endless payroll arguments. This guide walks through the calculation, who is legally owed it, why your “regular rate” is probably higher than your base wage, and what to do when the check is short.
Get your numbers instantly with the free overtime pay calculator.
How do you calculate overtime pay?
Three steps: take your regular hourly rate, multiply by 1.5, and multiply by the hours worked beyond 40 in the workweek. At $25 an hour with 10 overtime hours: 25 × 1.5 = $37.50, times 10 = $375 of overtime pay, on top of $1,000 regular pay — $1,375 for the week.
Run it at scale and the premium matters: those same 10 weekly overtime hours are worth $19,500 a year. That is why small errors — a wrong rate, a missed hour — are worth checking. Overtime is computed week by week, never averaged across a pay period.
Who is entitled to overtime pay?
Under the Fair Labor Standards Act, non-exempt employees are owed overtime regardless of whether they are paid hourly or by salary. You are generally exempt — not owed overtime — only if you earn at least $684 per week on a salary basis and your duties are executive, administrative, or professional in nature.
Job titles do not decide this; duties do. “Assistant managers” who mostly run a register, “supervisors” with no one to supervise, and salaried staff doing routine production work are classic misclassifications — and misclassified workers can recover unpaid overtime going back two to three years.
What counts as your “regular rate”?
More than your base wage. The FLSA regular rate includes shift differentials, non-discretionary bonuses, and commissions — total pay for the week divided by total hours worked. Earn a $100 weekly production bonus on top of $25/hr wages and your regular rate — and therefore your overtime rate — is higher than $25 suggests.
This is the most common legitimate underpayment: employers who calculate overtime off the base rate alone while paying bonuses on top. If your paycheck shows overtime priced exactly at 1.5 × base despite bonuses or differentials, that gap is worth a written question to payroll.
How is overtime taxed?
Overtime income is taxed at the same rates as regular income — there is no special overtime tax bracket. Big overtime weeks often look over-taxed because withholding assumes that week’s pay is your new normal; the excess washes out at filing. See the true net with the paycheck calculator.
One 2026 wrinkle: for tax years 2025–2028, the federal “no tax on overtime” provision lets you deduct the premium half of FLSA overtime pay (the 0.5 above your regular rate), up to $12,500 ($25,000 joint). Keep the pay stub that breaks out your overtime premium — you will need the figure at filing time.
What if your employer will not pay overtime?
Start by documenting everything: your actual hours (a personal log beats memory), your pay stubs, and any policy telling you to work off the clock — which is itself a violation. Raise it with payroll or HR in writing; honest mistakes do get fixed at this step more often than people expect.
If that fails, file a complaint with the US Department of Labor’s Wage and Hour Division (free, and retaliation for complaining is illegal) or consult an employment lawyer — unpaid-overtime claims commonly recover back pay plus an equal amount in damages. The deadline is two years, three for willful violations, so do not sit on a shorted check.
Frequently Asked Questions
What is time and a half for $20 an hour?
$30 an hour. Time and a half is always the regular rate × 1.5 — $20 becomes $30, $18 becomes $27, $30 becomes $45. Double time, where it applies, is the rate × 2.
Can overtime be paid as time off instead (comp time)?
Private employers generally cannot swap overtime pay for time off in a later week — the FLSA requires cash wages at 1.5× in the week the overtime is worked. Government employers have limited comp-time options; private-sector “bank your hours” arrangements are a red flag.
Does overtime apply after 8 hours in a day?
Federally, no — the FLSA counts only weekly hours past 40. But some states add daily rules: California, for example, requires overtime after 8 hours in a day and double time after 12. Check your state labor department’s rule if your shifts are long.
How many hours can you work before overtime in a week?
Exactly 40. Hour 41 is the first overtime hour under federal law (unless a state daily rule triggers it sooner). There is no federal cap on total hours for most adult workers — the law prices extra hours rather than forbidding them.
Overtime rules per the US Department of Labor (FLSA) as of 2026; the overtime deduction figures reflect the 2025–2028 federal provision. General information, not legal advice — state rules and union contracts can be more generous.