How to Calculate Overtime Pay
Overtime pay is additional compensation for hours worked beyond the standard workweek. Under the Fair Labor Standards Act (FLSA), non-exempt employees must receive at least 1.5 times their regular rate of pay for all hours worked over 40 in a workweek. Some employers, union contracts, and state laws may require double-time pay for certain circumstances like holidays, weekends, or hours exceeding a daily threshold.
- 1Regular pay: 40 hours x $25.00 = $1,000.00
- 2Overtime rate: $25.00 x 1.5 = $37.50/hour
- 3Overtime pay: 10 hours x $37.50 = $375.00
- 4Total weekly pay: $1,000.00 + $375.00 = $1,375.00
- 5Annual with this OT: $1,375.00 x 52 weeks = $71,500/year
- 6Compared to base salary of $52,000, overtime adds $19,500/year (37.5% boost)
Overtime Pay Quick Reference Table
| Hourly Rate | OT Rate (1.5x) | 5 OT Hours | 10 OT Hours | 15 OT Hours | 20 OT Hours |
|---|---|---|---|---|---|
| $15.00 | $22.50 | $112.50 | $225.00 | $337.50 | $450.00 |
| $20.00 | $30.00 | $150.00 | $300.00 | $450.00 | $600.00 |
| $25.00 | $37.50 | $187.50 | $375.00 | $562.50 | $750.00 |
| $30.00 | $45.00 | $225.00 | $450.00 | $675.00 | $900.00 |
| $35.00 | $52.50 | $262.50 | $525.00 | $787.50 | $1,050.00 |
| $40.00 | $60.00 | $300.00 | $600.00 | $900.00 | $1,200.00 |
| $50.00 | $75.00 | $375.00 | $750.00 | $1,125.00 | $1,500.00 |
FLSA Overtime Rules in 2026
The Fair Labor Standards Act requires overtime pay for non-exempt employees who work more than 40 hours in a workweek. The overtime rate must be at least 1.5 times the regular rate of pay. As of 2026, salaried employees must earn at least $58,656 per year ($1,128 per week) to be classified as exempt from overtime. If you are salaried but earn less than this threshold, you are entitled to overtime pay.
- Overtime is calculated per workweek (7 consecutive days), not per pay period
- Employers cannot average hours over two or more weeks to avoid overtime
- Some states like California require daily overtime after 8 hours in a single day
- California also requires double time after 12 hours in a day or after 8 hours on the 7th consecutive day
- Exempt employees (salaried above the threshold with qualifying duties) are not entitled to overtime
- Common exempt categories: executive, administrative, professional, computer, and outside sales employees
State-Specific Overtime Rules
While federal law sets the minimum overtime standard, several states have more generous rules. California requires daily overtime (1.5x after 8 hours, 2x after 12 hours), Colorado requires overtime after 12 hours in a day or 40 hours in a week, and Alaska requires overtime after 8 hours in a day or 40 hours in a week. Always check your state's labor laws, as the law more favorable to the employee applies.
Overtime violations are among the most common wage theft issues. If your employer classifies you as exempt but you perform primarily non-exempt duties, or if you earn less than the $58,656 salary threshold and are not paid overtime, you may be entitled to back pay. The statute of limitations is 2 years (3 years for willful violations).
Annual Impact of Regular Overtime
| OT Hours/Week | Weekly OT Pay | Annual OT Pay | Total Annual | % Increase |
|---|---|---|---|---|
| 0 hours | $0 | $0 | $52,000 | 0% |
| 5 hours | $187.50 | $9,750 | $61,750 | 18.8% |
| 10 hours | $375.00 | $19,500 | $71,500 | 37.5% |
| 15 hours | $562.50 | $29,250 | $81,250 | 56.3% |
| 20 hours | $750.00 | $39,000 | $91,000 | 75.0% |
How Overtime Affects Your Taxes
Overtime pay is taxed the same as regular income. It does not get taxed at a special higher rate, despite a common misconception. However, because overtime increases your total income, it may push some of your income into a higher marginal tax bracket. For example, if your regular salary of $52,000 keeps you in the 22% bracket, $19,500 in overtime pushes your total to $71,500, but only the income above the bracket threshold is taxed at the higher rate. Overtime is always worth earning from a tax perspective.
