How to Calculate Overtime Pay: Formula and Examples
Under US federal law most hourly employees get at least 1.5 times their regular rate for hours over 40 in a week. Here is the formula and an example.
The formula
- Overtime hours = total hours – 40 (when positive)
- Overtime rate = regular rate x 1.5
- Gross pay = regular hours x rate + overtime hours x overtime rate
Worked example
Someone earns $20 an hour and works 46 hours in a week.
| Step | Calculation | Result |
|---|---|---|
| Overtime hours | 46 – 40 | 6 |
| Overtime rate | $20 x 1.5 | $30 |
| Regular pay | 40 x $20 | $800 |
| Overtime pay | 6 x $30 | $180 |
| Gross pay | $800 + $180 | $980 |
Excel formula
With hours in B2 and rate in C2: =MIN(B2,40)*C2+MAX(B2-40,0)*C2*1.5. For 46 hours at $20 it returns 980.
Double time and daily overtime
The federal rule is weekly. Some states, such as California, also require overtime for long days and double time in certain cases, and some employers pay double time by policy. Check your state labor department for the rules that apply to you.
The regular rate is not always the hourly wage
Non-discretionary bonuses and some other pay can be included when the regular rate is worked out, which raises the overtime rate. Payroll or an employment professional should confirm how this applies.
Who gets overtime?
Many salaried employees are exempt only if they meet the duties and salary tests. A job title or salary alone does not decide it. If you are unsure, check with the US Department of Labor or your state agency.
Use the calculators
Try the overtime calculator, then see take-home pay with the paycheck calculator. Track hours with the time tracking spreadsheet.
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Frequently asked questions
What is time and a half?
Pay at 1.5 times the regular hourly rate.
How do I calculate overtime for a salaried employee?
If they are non-exempt, divide weekly salary by hours worked to get the regular rate, then pay half that rate extra for each overtime hour, or follow your state rule. Confirm with payroll.
Do paid holidays count toward the 40 hours?
Under federal law, hours paid but not worked generally do not count as hours worked. Company policy may differ.
Is overtime calculated daily or weekly?
Federally weekly. Some states add daily rules.
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