How to Calculate Overtime Pay
Overtime pay is where paychecks most often go wrong, and where each mistake costs the most. The good news is that the math is straightforward once you know your rule. Here's how to calculate overtime pay by hand, with examples, so you can check your own check.
The basic overtime formula
Overtime pay = overtime hours x hourly rate x overtime multiplier.
Most overtime is paid at 1.5 times your regular rate, often called time-and-a-half. Some situations pay double time (2x).
Know your overtime rule first
Under U.S. federal law, most hourly employees earn overtime for hours over 40 in a workweek. Some states add daily overtime. California, for example, generally requires overtime after 8 hours in a day and double time after 12. Your employer or union contract may be more generous.
Rules depend on your state and job, so check your state labor department or employee handbook. This post is general information, not legal advice.
How to calculate weekly overtime
Step 1: Add up your hours for the workweek
Use decimal hours. If you need help, see how to calculate hours worked and how to convert time to decimal.
Step 2: Split regular and overtime hours
Hours up to 40 are regular. Everything above 40 is overtime.
Step 3: Calculate each part
Example: $18 an hour, 46.5 hours this week.
- Regular pay: 40 x $18 = $720
- Overtime rate: $18 x 1.5 = $27
- Overtime pay: 6.5 x $27 = $175.50
- Total gross pay: $895.50
How to calculate daily overtime
If your state or employer pays daily overtime, check each day first. Example with overtime after 8 hours a day at $20 an hour, and a 10-hour Monday:
- Regular: 8 x $20 = $160
- Overtime: 2 x $30 = $60
- Monday total: $220
When both daily and weekly rules apply, hours already counted as daily overtime usually aren't counted again toward weekly overtime. This is where hand math gets confusing fast.
Things that change your overtime rate
- Raises mid-week. Each hour should use the rate in effect when you worked it.
- Two rates at one employer. Overtime may be based on a weighted average of both.
- Some bonuses. Certain bonuses can raise the regular rate used for overtime.
If your check doesn't match your math, see how to make sure your paycheck is right.
The easier way: automatic overtime
Hours Tracker Time Clock calculates overtime on every shift so you don't have to:
- 1.5x and 2x multipliers
- Daily and weekly thresholds
- Unpaid breaks removed first
- Live earnings with overtime included
- Overtime markers on your calendar
More on this in how to track overtime hours automatically.
Check your overtime in seconds
Download Hours Tracker Time Clock on the App Store or Google Play, set your overtime rule once, and let it do the math.