Overtime Calculator

How Overtime Pay Is Calculated

The core formula is straightforward: regular pay = hourly rate × regular hours; overtime pay = hourly rate × overtime hours × multiplier. Total weekly gross = regular + overtime + any double-time.

Example: a $25/hour employee in California works a 14-hour shift on a normal day. The first 8 hours are regular ($200), hours 8-12 are time-and-a-half (4 × $25 × 1.5 = $150), hours 12-14 are double-time (2 × $25 × 2 = $100). Daily gross: $450. Without California daily OT rules, the same employee under FLSA-only would earn $200 + (6 × $25) = $350 — California rules add $100 in protections per shift.

The "regular rate" used for overtime must include most non-discretionary bonuses, shift differentials, and commissions. If you earn a $200 production bonus during a 50-hour week at $25/hour, your regular rate becomes ($25 × 50 + $200) / 50 = $29/hour, not $25. Overtime then pays at $29 × 1.5 = $43.50, not $37.50.

Federal FLSA vs. State Overtime Rules

The FLSA establishes a federal floor — states can require more, but never less. Here is how the major state regimes compare:

Some industries have additional rules: hospital nurses can be on 14-day overtime cycles (8/80 rule), agricultural workers in California gained full overtime protection in 2022, and federal employees under 5 USC 5542 use a different calculation. Always check your state Department of Labor website for the most current rules.

FLSA Exemptions: Who Does NOT Get Overtime?

Not all employees are entitled to overtime. The FLSA exempts certain "white-collar" workers if they meet both a salary test and a duties test. The 2026 thresholds (Department of Labor final rule) are:

Even if you meet the salary test, you must also satisfy the duties test for one of five categories: executive (manage 2+ employees, hire/fire input), administrative (office work directly related to management policies), professional (advanced learning or creative artistic work), computer (software engineering, systems analysis), or outside sales. State laws often have higher thresholds — California's 2026 exempt minimum is $68,640/year ($1,320/week), for example.

Misclassification is one of the biggest sources of unpaid overtime. If you have a job title with "manager" or "specialist" but spend most of your day on routine non-exempt tasks, you may be misclassified. The DOL recovered $3.4 billion in unpaid overtime back wages from 2015-2024. If you suspect misclassification, contact the DOL Wage and Hour Division — it costs you nothing.

Overtime Tax Withholding: The Truth About "Higher Tax Rates"

A common myth is that overtime is taxed at a higher rate than regular wages. This is false. Overtime wages are taxed at exactly the same rates as any other wages. The misconception comes from withholding patterns, not actual taxation.

When your paycheck is larger than usual due to overtime, the IRS aggregate withholding method temporarily treats that paycheck as if you earn it every period. A worker who normally takes home $1,500/week pretax but suddenly earns $2,500 due to overtime gets withheld as if they earn $130,000/year, even though their actual annual is $84,000. The system over-withholds, and the excess is refunded when you file your tax return.

Overtime hours can push you into a higher marginal bracket, but only the income above the bracket threshold is taxed at the new rate — not your entire income. The aggregate withholding method on individual paychecks can over-withhold during high-OT weeks, but you get it back at tax time. See the Net Pay Calculator for accurate take-home modeling.

Annual Earnings Impact: How Much Does OT Add?

Consistent overtime can add 20-50% to a worker's annual income. Here are the impact ranges for a $25/hour worker (50 weeks per year):

Note: sustained 60-hour weeks have well-documented health impacts (cardiovascular risk, sleep deficit, errors). Trade-offs matter — the 1.5x multiplier feels great but a 50% income boost from working 50% more hours is roughly even on a per-hour-of-life basis. Weigh OT against your true hourly value.

Common Overtime Mistakes Employers Make

If you suspect you are owed unpaid overtime, the most common employer errors are:

• Misclassifying hourly workers as salaried exempt: Just being on salary does not make you exempt. You must also meet the duties test for executive, administrative, professional, computer, or outside sales work.
• Excluding bonuses from regular rate: Non-discretionary bonuses must be included in the OT regular rate calculation. Many employers calculate OT only on base hourly rate, underpaying.
• Off-the-clock work: Pre-shift setup, post-shift cleanup, mandatory training, on-call time when restricted, and "voluntary" work are usually compensable. If your boss requires it, you should be paid for it.
• Improper "comp time": Private-sector employers cannot offer comp time in lieu of overtime pay (only public-sector employees may receive comp time under specific conditions).
• Wrong workweek definition: The FLSA workweek is a fixed 168-hour period. Employers cannot retroactively change the workweek to avoid overtime obligations.
• Averaging hours across pay periods: 30 hours one week and 50 the next is 10 hours of OT — you cannot average them to avoid the 40-hour threshold.

If you suspect any of these, document your hours independently (a simple notebook or app), keep copies of pay stubs, and contact the DOL Wage and Hour Division. The statute of limitations is typically 2 years (3 for willful violations). Use our Bonus Calculator to verify your bonus impact and the Net Pay Calculator to confirm your take-home math.