Overtime Calculator

Article — Overtime Calculator

Overtime pay: the FLSA formula, the salary trap, and where state laws override federal

Federal overtime law (the Fair Labor Standards Act, 1938) requires non-exempt employees to be paid at least 1.5× their regular rate for any hour worked beyond 40 in a single workweek. The formula is regular pay (rate × 40 hours) plus overtime pay (rate × 1.5 × overtime hours). At $20/hour for a 48-hour week the math is $800 + $240 = $1,040. The FLSA sets a federal minimum; some states require daily overtime, double time at higher thresholds, or both.

The formula is straightforward. The complexity is in the rules around who is entitled to overtime, what counts as the “regular rate” for the multiplier, and how state laws stack on top of federal ones.

How overtime pay is calculated

Overtime pay is the base hourly rate times the overtime multiplier times the overtime hours. The default multiplier is 1.5 (“time and a half”). For non-exempt hourly workers in the United States, anything over 40 hours in a workweek is overtime.

For a $20/hour worker working 48 hours: regular pay = $800, OT pay = $240, total = $1,040. The effective rate is $1,040 ÷ 48 = $21.67/hour. Over 52 weeks at the same pace, annual pay is $54,080 - a $12,480 increase over the $41,600 baseline of a straight 40-hour week.

FLSA overtime rules in plain English

The Fair Labor Standards Act sets the federal floor for overtime pay. Every state must meet at least the FLSA standard; many add stronger rules. The act has been amended dozens of times since 1938, but the core overtime provision has stayed nearly intact.

• Threshold: 40 hours per workweek (a fixed 7-consecutive-day period chosen by the employer)
• Multiplier: at least 1.5× the regular rate of pay
• Who is covered: non-exempt employees (most hourly workers; some salaried workers)
• Who is exempt: executives, administrators, professionals meeting all three FLSA tests
• Daily threshold: none at federal level (some states add one)
• Comp time in lieu of OT pay: prohibited in the private sector
• Averaging across weeks: prohibited - each week is calculated separately

The U.S. Department of Labor's Wage and Hour Division (WHD) enforces the FLSA. Workers who believe they are owed overtime can file a complaint with the WHD at no cost; the agency recovered $274 million in back wages for workers in fiscal year 2024.

Salary and overtime: the three-part exempt test

The most common myth about overtime is that salaried workers do not get it. The reality is that salary alone does not exempt anyone from FLSA overtime requirements. An employee is exempt only if they pass all three of the FLSA tests: salary basis, salary threshold, and duties.

A salaried employee earning $30,000/year cannot be exempt - they fail the salary threshold. A salaried employee earning $40,000 passes the salary tests but is only exempt if their actual job duties qualify. A salaried administrative assistant with no decision authority would generally not pass the duties test even if paid $50,000.

California and other states with daily overtime

California is the most aggressive overtime state. The Industrial Welfare Commission orders require 1.5× pay for any hour beyond 8 in a single workday, and 2× (double time) for any hour beyond 12 in a single day. On the 7th consecutive workday in a single workweek, the first 8 hours pay 1.5× and any additional hours pay 2×.

Alaska and Nevada both require daily overtime above 8 hours under specific conditions. Alaska applies the rule to employers with 4 or more employees; Nevada applies it only if the worker earns less than 1.5× the minimum wage. Most other states follow the federal weekly-only rule.

Double time versus overtime

Overtime and double time are different premium rates. Overtime is the federal minimum at 1.5×. Double time is 2× and is required by federal law in zero cases - it appears only in state law (California, mainly) and in employer policies or collective bargaining agreements.

Many union contracts require double time for hours over 12 in a day, work on Sundays, or work on holidays. The cleaner the rule, the easier it is to enforce - some contracts specify time and a half for the first 8 hours of OT and double time after that, regardless of total weekly hours.

Overtime pay examples at common wage rates

The calculator above does the math for any rate and any hour count. A quick reference for the most common combinations:

The annual impact of overtime scales linearly with hours. A worker at $20/hour gaining 5 OT hours per week earns an extra $7,800/year. The same worker gaining 10 OT hours per week earns an extra $15,600/year - a 37.5% boost over a 40-hour baseline.

The 2025 federal “No Tax on Overtime” deduction

In July 2025, the One Big Beautiful Bill Act (Public Law 119-21) created a new federal income tax deduction for qualified overtime compensation. Workers can deduct up to $12,500 of OT pay from federal taxable income ($25,000 for joint filers). A worker in the 22% federal tax bracket saves up to $2,750/year.

Unpaid overtime and how it gets recovered

Unpaid overtime is one of the most common federal labor law violations. The most frequent pattern is misclassification: workers paid as salaried “exempt” employees who should have been classified as non-exempt and paid OT. The second most common is “off-the-clock” work - email replies after hours, mandatory pre-shift setup, post-shift cleanup - that is never recorded as work time.

Under the FLSA, employees can recover up to 2 years of unpaid overtime (3 years if the violation was willful), plus an equal amount in liquidated damages. A worker owed $10,000 of unpaid OT may recover $20,000 (the unpaid amount doubled), plus attorney fees if the case goes to court. Class-action lawsuits against large employers for systemic misclassification have produced settlements of tens of millions of dollars; Walmart, FedEx, and Amazon have each settled multi-state OT cases for $100M or more in the past two decades.