How to calculate overtime pay: formulas and examples

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.

⏱ 7 min readUpdated November 2026Overtime math

Animated clock with hands turning1.5×Overtime math

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Found it: the regular rate trapBefore multiplying by 1.5, add nondiscretionary bonuses and shift differentials into the regular rate. That one step is where most overtime math goes wrong.
In shortTo calculate overtime for a non-exempt employee under federal law, total the hours worked in the workweek, subtract 40 to find overtime hours, work out the regular rate of pay (which includes most bonuses, differentials and commissions) and pay at least 1.5 times that rate for each overtime hour. With one hourly rate and no extras, overtime pay is simply hourly rate × 1.5 × hours over 40. Some states, such as California, also require daily overtime and double time.
Key takeaways

The basic rule

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.

Example 1: one hourly rate

An employee earns $18 an hour and works 46 hours in the workweek.

Overtime with one hourly rate
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

Example 2: two different pay rates

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.

Overtime with two pay rates (weighted average)
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.

Example 3: a non-discretionary bonus

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.

Overtime with a weekly bonus
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.

Example 4: salaried non-exempt employee

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.

Overtime for a salaried non-exempt employee
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.

Example 5: tipped employee with a tip credit

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.

Federal overtime cash wage with a tip credit
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.

Example 6: daily overtime in California

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.

California daily overtime example (one 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.

Example 7: two locations, one employer

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 DOL’s three-step overtime method

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.

Common overtime mistakes

Overtime check complete.

See common payroll errors for how to fix mistakes when they happen.

Keep accurate records

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.

Frequently asked questions

How do you calculate overtime pay?

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.

Is overtime calculated weekly or biweekly?

Under federal law, overtime is calculated per workweek. Hours cannot be averaged over two weeks, even with a biweekly pay period.

Do bonuses affect overtime pay?

Non-discretionary bonuses, such as production, attendance or performance bonuses promised in advance, must be included in the regular rate, which increases overtime pay.

Do salaried employees get overtime?

Salaried employees who do not meet an exemption’s salary and duties tests are non-exempt and must be paid overtime.

Can I give comp time instead of overtime?

Private-sector employers generally cannot substitute comp time for overtime pay under the FLSA. Rules differ for public employers.

Does PTO or holiday time count toward overtime?

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.

Is overtime calculated biweekly?

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.

Where to go next

You may also need

Let the timesheet do the overtime math

EZTime totals hours by workweek, flags overtime building up and exports reports to Excel or PDF for payroll.

Disclaimer: This guide on overtime math is general information, not legal advice. Overtime rules vary by state and city and change over time, and exemptions have specific conditions. Check current federal and state rules or consult an employment attorney or payroll professional.