How much is that extra shift worth?
Overtime can add a lot to a paycheck, but the rules behind it are easy to misread. This calculator splits your week into regular hours and overtime hours, applies the right multiplier and shows the total you should see on your pay stub before taxes.
The rule in the United States
Under the Fair Labor Standards Act (FLSA), non-exempt employees must receive at least 1.5 times their regular rate for every hour worked beyond 40 in a workweek. A few points matter:
- The workweek is a fixed, recurring 168-hour period chosen by the employer. Hours cannot be averaged over two weeks.
- The regular rate includes most non-discretionary pay, such as shift differentials and production bonuses, not just the base wage.
- Paid time off and holidays usually do not count as hours worked for the 40-hour test.
- Some states go further. California, for example, requires time and a half after 8 hours in a day and double time after 12 hours in a day.
The formula
- Regular hours = min(hours worked, 40).
- Overtime hours = hours above 40, minus any hours paid at double time.
- Total pay = rate × regular hours + rate × 1.5 × overtime hours + rate × 2 × double-time hours.
Worked example: 48 hours at $25
- Regular pay: 40 × $25 = $1,000.
- Overtime rate: $25 × 1.5 = $37.50 an hour.
- Overtime pay: 8 × $37.50 = $300.
- Weekly total: $1,300, an average of $27.08 per hour worked.
Now a California week of 50 hours that includes 2 hours past the 12-hour daily mark: 8 hours at $37.50 ($300) plus 2 hours at $50 ($100) gives $400 of premium pay, for a total of $1,400.
Overtime by hours worked
| Hours in the week | Overtime pay | Weekly total | Average per hour |
|---|---|---|---|
| 40 | $0 | $1,000.00 | $25.00 |
| 45 | $187.50 | $1,187.50 | $26.39 |
| 50 | $375.00 | $1,375.00 | $27.50 |
| 55 | $562.50 | $1,562.50 | $28.41 |
| 60 | $750.00 | $1,750.00 | $29.17 |
Who is not entitled to overtime
Exempt employees are paid a salary above the federal threshold and perform executive, administrative or professional duties. Job title alone does not make someone exempt: the salary level and the actual duties both have to qualify. If you are unsure, the Department of Labor’s Wage and Hour Division publishes the tests and takes complaints.
Taxes on overtime
Overtime is ordinary wage income for payroll purposes: FICA applies in full, and withholding on a large overtime check can look high because payroll software annualizes it. Recent federal law also created a temporary deduction for part of qualified overtime premium pay on your income tax return, subject to income limits, so keep your pay stubs and check the current IRS guidance when you file.