How to Calculate Overtime Pay (2026)

Overtime pay under federal law is simple to state and easy to get wrong in practice: for every hour over 40 in a workweek, you are owed at least one and a half times your regular rate of pay. The two places paychecks go wrong are the word workweek and the words regular rate. This guide walks through the calculation the way the Department of Labor does it, shows the cases that trip people up, and ends with a quick way to check your own stub.

The basic formula

1. Count the hours you worked in the workweek.
2. Subtract 40. Anything left is overtime hours.
3. Work out your regular rate for that week.
4. Overtime pay = overtime hours × regular rate × 1.5.
5. Gross pay = (40 × regular rate) + overtime pay, plus any other pay for the week.

For a worker on a flat $20 an hour who worked 46 hours, that is 6 overtime hours. Regular pay is 40 × $20 = $800. Overtime pay is 6 × $20 × 1.5 = $180. Gross for the week is $980. If the stub shows $920, the overtime was paid at straight time, and the difference is $60.

Step 1: the workweek is fixed, not the calendar week

The Fair Labor Standards Act (FLSA) defines a workweek as a fixed and regularly recurring period of 168 hours, seven consecutive 24-hour periods. Your employer picks when it starts, and it does not have to be Monday or Sunday. It can begin at 6 a.m. on a Thursday if that is what the employer set. What it cannot do is move around from week to week to avoid overtime.

Two consequences follow:

• Overtime is never averaged across weeks. On a biweekly paycheck, each week stands alone. 48 hours then 32 hours is 8 hours of overtime, not zero.
• Pay period and workweek are different things. A semi-monthly pay period cuts across workweeks. Your overtime is still worked out week by week, and a week that straddles two pay periods is usually settled on the second check.

If you do not know when your employer's workweek starts, it should be in the handbook or on the time clock system. Ask. It changes the overtime math.

Step 2: hours worked, not hours scheduled

Overtime is based on hours actually worked. That includes time you were required or allowed to work, whether or not it was scheduled: coming in early to set up, staying late to close, working through a lunch that the system deducted anyway, answering work messages at home if that is expected. Short rest breaks of about 5 to 20 minutes count as hours worked. A real meal period of 30 minutes or more, where you are completely relieved of duty, does not.

Paid time off, holidays you did not work, and sick days are not hours worked for overtime purposes, even if they are paid. A 32-hour week plus an 8-hour paid holiday is 40 hours of pay and zero hours of overtime.

Step 3: the regular rate is more than your hourly rate

This is the step most people skip, and it is where the Department of Labor finds the most underpayment. The regular rate is all the pay you earned for the week, divided by all the hours you worked, before the 1.5 multiplier is applied. "All the pay" includes:

• Your hourly wages.
• Shift differentials for nights, weekends or hazardous work.
• Nondiscretionary bonuses: attendance bonuses, production bonuses, bonuses promised in advance for hitting a target.
• Commissions.
• On-call pay in many cases.

It excludes a short list of things, such as gifts, true discretionary bonuses, expense reimbursements, paid time off, and premium pay that is already at least time and a half.

Here is why it matters. Suppose you earn $18 an hour, worked 50 hours, and got a $100 attendance bonus for the week.

• Straight-time pay: 50 × $18 = $900.
• Add the bonus: $1,000.
• Regular rate: $1,000 ÷ 50 = $20.
• Overtime premium owed: 10 overtime hours × $20 × 0.5 = $100.
• Gross: $1,000 + $100 = $1,100.

If your employer paid 10 hours × $18 × 1.5 = $270 of overtime on top of 40 × $18 and the $100 bonus, your gross would be $1,090. The missing $10 is the overtime premium on the bonus. Over a year of bonuses and differentials, this adds up.

Two rates in one week

If you work two jobs for the same employer at different rates, or your rate changed mid-week, the regular rate is the weighted average: total straight-time pay for the week divided by total hours. Overtime is then paid on that blended rate for the hours over 40. The shift differential calculator linked below does this math.

Salaried but nonexempt

A salary does not make you exempt from overtime. If your duties do not meet an exemption, your regular rate is the weekly salary divided by the number of hours the salary is intended to cover, typically 40. Overtime is then owed at 1.5 times that rate for every hour over 40.

Step 4: daily overtime in some states

Federal law has no daily overtime. Several states do, and where state law is more generous, it applies.

Daily and weekly overtime are never paid twice for the same hour. In California, if you worked five 10-hour days, you have 10 hours of daily overtime and 40 regular hours; the weekly rule adds nothing because only non-overtime hours count toward the 40.

Step 5: special cases

Tipped workers. Overtime is calculated on the full minimum wage, then the tip credit is subtracted. Under federal rules that is (1.5 × $7.25) − $5.12 = $5.76 per overtime hour in cash wages. An employer who pays 1.5 × $2.13 is underpaying.

Time clock rounding. Employers may round punches to the nearest quarter hour as long as the practice averages out. Rounding that consistently removes minutes can push a week from 40.2 hours to 40.0 and erase the overtime. Compare your actual punches to the rounded ones.

Comp time instead of pay. Private employers cannot give hourly workers time off instead of overtime pay. Public employers can, under specific rules.

How to check your own paycheck

1. Add up your actual hours for each workweek in the pay period, using your own record, not the employer's edited punches.
2. Note any bonus, differential or commission paid for those weeks.
3. Compute the regular rate for each week and the overtime premium.
4. Compare the total with the gross on your stub.

Small differences are usually rounding. Repeated differences in the same direction are a pattern worth raising with payroll, and if that does not resolve it, with your state labor department or the Department of Labor's Wage and Hour Division. Keep your own hours log; the Department of Labor itself recommends it, because a dated record is what settles disputes.