How to Calculate Overtime Pay

What Is Overtime Pay?

Overtime pay is the extra compensation you earn when you work beyond a certain number of hours — either in a single day or across a full workweek. In the United States, most hourly workers are entitled to overtime pay under the Fair Labor Standards Act (FLSA), which sets the federal baseline rules.

The standard overtime rate is 1.5 times your regular hourly rate — often called "time and a half." So if you earn $20 per hour normally, your overtime rate is $30 per hour.

Overtime rules vary depending on where you work, what industry you're in, and whether your employer follows weekly or daily overtime rules. This guide breaks all of it down.

Federal Overtime Rules (FLSA)

Under the Fair Labor Standards Act (FLSA), non-exempt employees must receive overtime pay for any hours worked beyond 40 hours in a workweek. The federal overtime rate is a minimum of 1.5x your regular rate.

For the official federal rule, see the U.S. Department of Labor's page on overtime pay.

Not everyone is covered. The FLSA exempts certain workers — often called "exempt employees" — including many salaried workers in executive, administrative, or professional roles earning above a set salary threshold. If you're hourly, you're almost certainly non-exempt and entitled to overtime.

How to Calculate Weekly Overtime

Weekly overtime is the most common system across the US. Here's the formula:

Weekly overtime example

Say you earn $20/hour and worked 46 hours this week.

• Regular pay: 40 hrs × $20 = $800
• Overtime hours: 46 − 40 = 6 hours
• Overtime rate: $20 × 1.5 = $30/hr
• Overtime pay: 6 hrs × $30 = $180
• Total: $980

What counts as "hours worked"?

All time your employer requires or allows you to work counts — including pre-shift prep, mandatory meetings, and travel between job sites. Commute time to and from home typically does not count.

How to Calculate Daily Overtime

Some states and employers use a daily overtime system, where overtime kicks in once you work beyond a certain number of hours in a single shift — regardless of your weekly total. The most common daily threshold is 8 hours.

Daily overtime example

You earn $20/hour, your daily OT threshold is 8 hours, and you work a 10-hour shift.

• Regular pay: 8 hrs × $20 = $160
• Daily overtime hours: 10 − 8 = 2 hours
• Daily overtime pay: 2 hrs × $30 = $60
• Total for that shift: $220

If you work multiple shifts like this and cross 40 hours for the week, weekly overtime would also apply to any additional hours not already counted as daily overtime.

Double Time — When It Applies

Double time means you're paid 2x your regular hourly rate. It typically kicks in when you work an especially long shift or a high number of hours in a week.

There is no federal double time requirement — it's set by state law or your employer's policy. The most common scenario is California, where daily double time applies after 12 hours in a single day.

Double time example

You earn $20/hour with 8-hr daily OT and 12-hr double time thresholds. You work a 14-hour shift.

• Regular pay: 8 hrs × $20 = $160
• Daily overtime (hrs 9–12): 4 hrs × $30 = $120
• Double time (hrs 13–14): 2 hrs × $40 = $80
• Total for that shift: $360

State-Specific Overtime Rules

Several states have overtime rules that go beyond the federal FLSA minimum. Always check what applies in your state — your employer must follow whichever rule is more favorable to you.

For California-specific daily overtime and double-time rules, see the California Department of Industrial Relations overtime FAQ.

Note: Laws change. Always verify the current rules with your state labor department, the U.S. Department of Labor, your union agreement, your employer policy, or an employment attorney.

Common Overtime Calculation Mistakes

Even well-meaning employers get overtime wrong. Here are the most common errors to watch for on your paycheck:

1. Using the wrong "regular rate"

Your regular rate for overtime purposes isn't just your base hourly wage. The FLSA requires that non-discretionary bonuses (like a production bonus) be included in the regular rate calculation. If your employer pays you a weekly bonus but doesn't factor it into your OT rate, your overtime may be underpaid.

2. Averaging hours across two weeks

Overtime is calculated per workweek — not per pay period. If you work 50 hours one week and 30 the next, you're owed 10 hours of overtime for the first week. Your employer can't average the two weeks together to avoid the overtime payout, even on a biweekly payroll.

3. Misclassifying employees as exempt

Some employers label workers as "managers" or "supervisors" to claim they're exempt from overtime — even when the person's actual duties are the same as hourly workers. Exempt status depends on real job duties and a salary threshold, not just a job title.

4. Not counting all hours worked

If your employer requires you to attend a mandatory meeting, complete training, or do work before clocking in, those hours count toward your 40-hour overtime threshold. "Off the clock" work that benefits the employer is generally still compensable.

5. Wrong overtime rate on daily OT

For workers with daily overtime (like in California), some employers accidentally apply the wrong tier — paying straight time instead of 1.5x, or forgetting double time kicks in after 12 hours. Always verify the rate applied to each tier on your pay stub.

How to Track Overtime Automatically

Doing this math manually every week is tedious — and easy to get wrong, especially if your hours vary or you work multiple jobs. That's exactly why we built Shift Log+.

Shift Log+ is a shift tracking app that calculates your overtime automatically after every shift. You configure your rules once — daily OT threshold, weekly threshold, overtime multiplier, double time — and the app does the rest. Every time you clock out, it shows you a full pay breakdown: regular hours, daily overtime, weekly overtime, double time, and your total gross pay for the period.

Frequently Asked Questions