Overtime Pay Calculator Guide — 2026
Overtime pay is one of the most searched payroll topics — and one of the most misunderstood. Whether you are checking that your paycheck is correct, planning a busy work period, or comparing the cost of overtime versus hiring additional staff, getting the calculation right matters. This guide explains how overtime pay works under US federal and state law in 2026, walks through the formulas step by step, and covers common misconceptions that can lead to either underpayment or surprise tax bills.
The FLSA Overtime Rule — What the Law Actually Requires
The US Fair Labor Standards Act (FLSA) requires employers to pay non-exempt employees at least 1.5 times their regular rate of pay for every hour worked above 40 in a single workweek. This is the federal floor — states and localities can and often do require more.
Key points workers frequently get wrong:
- The 40-hour threshold is weekly, not daily. Under federal law, you can work 12 hours on Monday and 4 hours Tuesday without overtime being triggered — what matters is the 7-day workweek total. (California is a major exception — see below.)
- A "workweek" is any fixed, recurring 7-day period set by the employer. It does not have to be Monday–Sunday. Employers cannot average hours over two weeks to avoid overtime.
- Being salaried does not automatically mean no overtime. Salaried non-exempt workers are still owed overtime. Only workers meeting both the salary-level test ($684/week) and a duties test (executive, administrative, professional, etc.) are exempt.
- The FLSA does not require double time. 2× pay is not federally mandated — it is required in specific circumstances by California state law, or by union/collective agreements.
Time-and-a-Half — The Most Common Overtime Rate
Time-and-a-half means your overtime hourly rate is 1.5 times your regular rate. This is the minimum rate required by the FLSA for hours above 40 per week for non-exempt workers.
Overtime rate = $22 × 1.5 = $33.00/hr
Regular pay = $22 × 40 = $880.00
Overtime pay = $33 × 10 = $330.00
Total pay = $880 + $330 = $1,210.00
Extra earned from premium = $330 − ($22 × 10) = $330 − $220 = $110.00
Double Time — When 2× Applies
Double time (2× your regular rate) is not required by US federal law but is mandated in specific situations under California law, and is common in certain industries through collective bargaining agreements and employer policies. In California, double time applies to:
- Hours worked over 12 in a single workday
- All hours worked on the 7th consecutive day of a workweek
Industries where double time is commonly negotiated through union contracts include construction, healthcare, and film/TV production. Retail and hospitality employers often offer double time voluntarily for public holidays, though this is a workplace policy, not a legal requirement in most states.
Hours 1–8: Regular pay = $38 × 8 = $304.00
Hours 9–12: OT at 1.5× = $38 × 1.5 × 4 = $228.00
Hours 13–14: Double time at 2× = $38 × 2 × 2 = $152.00
Total shift pay: $304 + $228 + $152 = $684.00
(vs $532 if paid straight time for all 14 hours — a $152 premium)
Calculating "Extra Earned" — The Real Value of Overtime Premium
The "extra earned" figure in this calculator shows how much more you receive because overtime hours attract a premium rate, versus what those same hours would have paid at your base rate. This is useful for understanding the true financial benefit of working overtime — and for employers, it shows the premium cost of overtime versus regular-time staffing.
Formula: Extra earned = (OT multiplier − 1) × Base rate × OT hours. At 1.5×, you earn a 50% premium on each overtime hour. At 2×, you earn a 100% premium. For a $25/hr worker doing 10 OT hours per week at 1.5× for 50 weeks, extra earned = 0.5 × $25 × 10 × 50 = $6,250 per year from the overtime premium alone.
Overtime Rules by State — Key Differences in 2026
Several states have rules that are more protective than the federal FLSA minimum. Workers in these states should be aware of the additional protections:
- California: Daily overtime (1.5× after 8 hrs/day, 2× after 12 hrs/day). Also applies to the first 8 hrs on a 7th consecutive workday (double time for all hours that day). Applies to most workers including domestic workers.
- Alaska: Daily overtime required — 1.5× for hours over 8 in a day, in addition to the 40-hour weekly standard.
- Nevada: Daily overtime (1.5×) for hours over 8 per day if the worker earns less than 1.5× the state minimum wage. Workers earning above that threshold are subject to weekly (40-hour) overtime only.
- Colorado: Daily overtime threshold of 12 hours per day and overtime on the 12th consecutive day of work in a 2-week period, under state wage order rules.
- Most other states: Follow the federal 40-hour weekly threshold with no daily overtime requirement.
Overtime and Non-Cash Compensation — the "Regular Rate" Problem
The FLSA defines overtime as 1.5× the "regular rate of pay" — which is not simply the hourly wage. The regular rate must include most forms of additional compensation received in the workweek, such as shift differentials, non-discretionary bonuses, on-call pay, and piece-rate earnings. It excludes gifts, vacation pay and discretionary bonuses.
This means if you earn a $100 weekly production bonus on top of a $20/hr wage for a 50-hour week, your regular rate is actually ($20 × 50 + $100) ÷ 50 = $22/hr — and your overtime rate is $33/hr, not $30/hr. Many employers and even some payroll systems get this wrong, resulting in overtime underpayment. The calculator above uses simple hourly rate inputs; if you have non-discretionary bonus pay, adjust your base rate accordingly for accurate results.
Is Overtime Taxed at a Higher Rate?
This is one of the most persistent overtime myths. There is no special "overtime tax." Overtime pay is taxed at exactly the same marginal income tax rates as regular pay — federal income tax, state income tax (where applicable), Social Security (6.2% up to the wage base) and Medicare (1.45%). What can happen is that earning more in a given pay period pushes more of that period's income into a higher withholding bracket, making your paycheck feel like it is taxed more. But this is a withholding timing issue — your actual annual tax liability is based on total annual income, not on whether individual dollars were earned as overtime.
Use our Take-Home Pay Calculator to estimate your net pay including overtime income after all US or UK taxes and deductions.
Annual Overtime Earnings — Planning Ahead
If you regularly work overtime, it can make a significant difference to your annual income. Use the "Annual" tab in the calculator above to project full-year overtime earnings. Some concrete examples at 1.5× overtime for a full 52-week year:
- $18/hr, 5 OT hrs/week: Base $37,440 + OT $7,020 = $44,460/yr
- $22/hr, 8 OT hrs/week: Base $45,760 + OT $13,728 = $59,488/yr
- $30/hr, 10 OT hrs/week: Base $62,400 + OT $23,400 = $85,800/yr
- $40/hr, 5 OT hrs/week: Base $83,200 + OT $15,600 = $98,800/yr
Related Calculators
- Hourly to Salary Calculator — convert your hourly rate (including overtime) to an annual salary equivalent.
- Salary to Hourly Calculator — convert annual salary to hourly rate to compare against an overtime-inclusive hourly role.
- Take-Home Pay Calculator — estimate net pay after US or UK taxes on your full earnings including overtime.
- Budget Calculator — plan how to allocate the extra earnings from overtime.
- Percentage Calculator — work out percentage pay increases and raise comparisons.
Frequently Asked Questions
1) How is overtime pay calculated under US law?
Under the FLSA, non-exempt employees must receive at least 1.5× their regular rate for hours worked over 40 in a workweek. Formula: Overtime pay = Base rate × 1.5 × OT hours. Total pay = (Base rate × Regular hours) + Overtime pay. Some states (notably California and Alaska) also require daily overtime regardless of weekly total.
2) What is time-and-a-half pay?
Time-and-a-half means your overtime rate is 1.5 times your regular hourly rate. At $20/hr, time-and-a-half = $30/hr for each overtime hour. This is the minimum overtime rate required by US federal law for non-exempt employees working over 40 hours in a workweek.
3) What is double time, and when is it required?
Double time (2×) means you earn twice your base rate. US federal law (FLSA) does not require double time — it is only legally mandated in California (for hours over 12 in a day or all hours on a 7th consecutive workday) and in some state/industry-specific rules. Many employers offer it voluntarily for holidays or under union agreements.
4) Who is exempt from overtime pay?
Workers who meet both a salary test (earning at least $684/week as of 2024) and a duties test (executive, administrative, professional, computer or outside sales roles) are generally exempt from FLSA overtime. Being salaried alone does not make you exempt — if your salary is below $684/week or your duties don't qualify, you are likely non-exempt and owed overtime. Check the US Department of Labor website for the full exemption criteria.
5) Does California have different overtime rules?
Yes — California applies both daily and weekly overtime. Workers are owed 1.5× for hours over 8 in a day (up to 12) and for the first 8 hours on the 7th consecutive workday. Double time applies for hours over 12 in a day and all hours on the 7th consecutive day. These rules are in addition to (not instead of) the federal 40-hour weekly rule.
6) Is overtime taxed at a higher rate?
No. There is no special overtime tax rate. Overtime is taxed at your regular marginal income tax rates — the same as all other earned income. Higher withholding on an overtime paycheck is a timing artefact; your actual tax liability depends on total annual income. Use our Take-Home Pay Calculator for a net estimate.
7) What does "extra earned" mean in the results?
Extra earned shows how much additional pay you receive because overtime hours are paid at a premium rate. Formula: Extra earned = Overtime pay − (Base rate × Overtime hours). For 8 OT hours at 1.5× on a $20/hr base: OT pay $240 − base-rate equivalent $160 = extra earned $80. If overtime were paid at straight time, you would earn $160 for those 8 hours; the 1.5× premium adds $80 on top.
8) Can I use a custom overtime multiplier?
Yes — select "Custom multiplier…" from the dropdown and enter any value. Common non-standard rates include 1.25× (some UK shift agreements), 1.3× (certain EU contracts), 1.75× (some US union agreements), and even above 2× in a small number of specialised contracts. Enter the exact multiplier specified in your employment contract or collective agreement.
9) How much overtime pay will I earn in a year?
Use the Annual tab in the calculator. As a quick reference: at $25/hr with 8 OT hours per week at 1.5× for 52 weeks, overtime pay totals $25 × 1.5 × 8 × 52 = $15,600 per year — on top of a $52,000 base salary, giving total annual earnings of $67,600. Use the Annual projection table for your exact figures.