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How it works
Under federal law, non-exempt employees generally get at least time and a half for hours over 40 in a workweek. The calculation has three parts:
- Straight-time pay = hourly rate × all hours worked, plus any bonus that counts.
- Regular rate = straight-time pay ÷ all hours worked.
- Overtime premium = overtime hours × regular rate × 0.5.
Add the straight-time pay and the premium, and you've got gross pay for the week.
An example
A team member earns $18 an hour and works 46 hours, with no bonus:
- Straight-time pay: 46 × $18 = $828
- Overtime hours: 6
- Premium: 6 × $18 × 0.5 = $54
- Gross pay: $882
That's the same result as paying 40 hours at $18 and 6 hours at $27. If there's a bonus, the two ways of doing it give different answers, and this is where a lot of employers underpay.
Why bonuses change the answer
Non-discretionary bonuses, such as an attendance bonus or a target people were promised, generally count in the regular rate. Take the bonus box above and try $100 on a 50-hour week at $20. The regular rate goes up to $22, so overtime hours are worth more than time and a half of $20.
A bonus that's purely discretionary, like an unexpected holiday gift, can often be left out. Read the Labor Department's overtime fact sheet for more detail.
What this calculator doesn't cover
- Daily overtime. California and a few other states have overtime after a certain number of hours in a day. You can change the threshold above, but that's for one period. Work out each rule separately.
- Double time. Change the multiplier to 2 for those hours, and calculate them separately.
- Tipped employees. The tip credit changes the math.
- Multiple pay rates. Someone working two jobs at different rates needs a weighted average, and this calculator takes only one rate.
- Taxes. The result is gross pay, before tax and deductions.
- Exempt employees. They aren't due overtime at all, if they really meet the salary and duties tests.
Common mistakes
Don't average hours across two weeks. Each workweek stands alone. Don't count paid time off or holidays as hours worked for federal overtime, unless your own policy says so. And don't forget hours people worked that you didn't ask for, if you knew about them. We've got a longer guide to overtime mistakes.
Stop doing this by hand
PinkLinq does this for your whole team. You set your workweek and threshold once, and hours split into regular and overtime each week. A "Heading into overtime" list shows who's going to cross the line, while you can still change the schedule.
This calculator is a planning tool, and doesn't replace advice from your payroll provider or an employment lawyer.