Step-by-step overtime calculations for hourly, multi-rate, bonus, salaried non-exempt and tipped employees, plus daily overtime, with worked examples you can follow.
The Fair Labor Standards Act requires covered employers to pay non-exempt employees at least one and a half times their regular rate of pay for hours worked over 40 in a workweek. Three definitions matter:
Use our overtime calculator to check any example below.
An employee earns $18 an hour and works 46 hours in the workweek.
| Step | Calculation | Result |
|---|---|---|
| Regular pay | 40 × $18 | $720.00 |
| Overtime rate | $18 × 1.5 | $27.00 |
| Overtime pay | 6 × $27 | $162.00 |
| Total | $720 + $162 | $882.00 |
When an employee works at two rates in the same week, the federal default is a weighted average regular rate. An employee works 30 hours as a cashier at $16 and 15 hours as a shift lead at $20, for 45 hours total.
| Step | Calculation | Result |
|---|---|---|
| Straight-time pay for all hours | (30 × $16) + (15 × $20) | $780.00 |
| Regular rate | $780 ÷ 45 | $17.33 |
| Overtime premium (half-time) | 5 × ($17.33 × 0.5) | $43.33 |
| Total | $780 + $43.33 | $823.33 |
Because straight-time pay already covers all 45 hours, only the extra half-time is added for overtime hours. Under certain conditions, including prior agreement, employers may instead pay overtime at 1.5 times the rate for the job performed during the overtime hours.
An employee earns $15 an hour, works 44 hours and receives a $60 production bonus for the week. Non-discretionary bonuses, those promised in advance or tied to performance, must be included in the regular rate.
| Step | Calculation | Result |
|---|---|---|
| Straight-time pay | 44 × $15 | $660.00 |
| Plus bonus | $660 + $60 | $720.00 |
| Regular rate | $720 ÷ 44 | $16.36 |
| Overtime premium | 4 × ($16.36 × 0.5) | $32.73 |
| Total | $720 + $32.73 | $752.73 |
Shift differentials and many commissions work the same way. See shift differential pay. If a bonus covers several weeks, it must be allocated back over those weeks and overtime recalculated, often as retroactive pay.
A salary does not make someone exempt. A non-exempt employee paid a fixed salary of $800 for a 40-hour workweek works 45 hours.
| Step | Calculation | Result |
|---|---|---|
| Regular rate | $800 ÷ 40 | $20.00 |
| Overtime pay | 5 × ($20 × 1.5) | $150.00 |
| Total | $800 + $150 | $950.00 |
If the salary is intended to cover all hours worked, whatever the number, the calculation is different and may involve the fluctuating workweek method, which has strict conditions. See exempt vs. non-exempt employees.
Under federal law, an employer taking the maximum tip credit pays a cash wage of $2.13 an hour, with a tip credit of $5.12 toward the $7.25 minimum wage. Overtime is calculated on the full minimum wage, and the tip credit stays the same.
| Step | Calculation | Result |
|---|---|---|
| Overtime rate on full minimum wage | $7.25 × 1.5 | $10.875 |
| Minus the same tip credit | $10.875 − $5.12 | $5.755 |
| Cash wage per overtime hour | about $5.76 |
Many states have higher minimum wages or do not allow a tip credit, so use your state’s figures. See tip credit.
California generally requires overtime at 1.5 times the regular rate for hours over 8 in a workday and over 40 in a workweek, and double time for hours over 12 in a workday, with additional rules for the seventh consecutive day. An employee earning $20 works a 13-hour day.
| Hours | Rate | Pay |
|---|---|---|
| First 8 hours | $20 | $160.00 |
| Hours 9 to 12 (4 hours) | $30 | $120.00 |
| Hour 13 (1 hour) | $40 | $40.00 |
| Total for the day | $320.00 |
Hours already paid as daily overtime are not paid again as weekly overtime. See daily overtime rules and the California overtime calculator.
An employee of a small restaurant group works 28 hours at one location and 17 hours at another in the same workweek, at $17 an hour at both. Because the same employer owns both locations, the hours are added together: 45 hours, so 5 hours of overtime at $25.50, or $127.50, on top of $680 for the first 40 hours, for a total of $807.50. Each location’s manager may see only part of the week, which is why central time tracking across locations matters.
The Department of Labor describes a simple method for calculating overtime when pay includes more than an hourly rate:
The half-time method works because straight-time pay for all hours is already included in the total. Only the extra half is added for overtime hours. If you pay an hourly rate and add 1.5 times that rate for overtime, you are applying the same idea in a different order.
Overtime check complete.
See common payroll errors for how to fix mistakes when they happen.
Overtime calculations are only as good as the hours behind them. Record start, end and break times every day, total hours per workweek and keep records for at least as long as federal and state law requires. EZTime tracks hours from a phone, web or kiosk, applies your workweek, flags employees approaching overtime thresholds and produces payroll-ready reports. See labor rule alerts.
Find hours over 40 in the workweek, calculate the regular rate (total pay including most bonuses and differentials divided by hours worked) and pay 1.5 times that rate for each overtime hour. With one hourly rate and no extras, multiply the hourly rate by 1.5 and by the overtime hours.
Under federal law, overtime is calculated per workweek. Hours cannot be averaged over two weeks, even with a biweekly pay period.
Non-discretionary bonuses, such as production, attendance or performance bonuses promised in advance, must be included in the regular rate, which increases overtime pay.
Salaried employees who do not meet an exemption’s salary and duties tests are non-exempt and must be paid overtime.
Private-sector employers generally cannot substitute comp time for overtime pay under the FLSA. Rules differ for public employers.
Under federal law, paid time off for holidays, vacation or sickness is not hours worked, so it does not count toward the 40 hours that trigger overtime. Some employers count it voluntarily, and some union contracts or state rules may differ.
No. Federal overtime is calculated per workweek, a fixed and recurring 168-hour period. You cannot average hours across two weeks, even if you pay biweekly.
EZTime totals hours by workweek, flags overtime building up and exports reports to Excel or PDF for payroll.