The overtime pay formula
Here is how to calculate overtime pay in three steps. First, split your hours into regular hours and overtime hours. Second, find your overtime rate. Third, multiply each group of hours by its rate and add them up.
Total pay = (regular hours × hourly rate) + (overtime hours × hourly rate × 1.5)
The 1.5 is the overtime multiplier. With time and a half it is 1.5. With double time it is 2. Some contracts use other multipliers, such as 1.25, but the formula stays the same.
Who gets overtime, after how many hours, and at what rate depends on your country, state and employment contract. Some jobs are exempt. Check your contract or local labor office for the rules that apply to you. The math below works for any set of rules.
How to calculate time and a half
Time and a half means 1.5 times your normal hourly rate. To calculate time and a half, multiply your hourly rate by 1.5. Another way: take your rate, add half of it on top.
| Hourly rate | Time and a half (× 1.5) | Double time (× 2) |
|---|---|---|
| $12.00 | $18.00 | $24.00 |
| $15.00 | $22.50 | $30.00 |
| $18.00 | $27.00 | $36.00 |
| $20.00 | $30.00 | $40.00 |
| $22.50 | $33.75 | $45.00 |
| $25.00 | $37.50 | $50.00 |
| $30.00 | $45.00 | $60.00 |
So time and a half of $20 is $30 an hour. Half of $20 is $10, and $20 + $10 = $30. Time and a half of $15 is $22.50, and of $18 it is $27.
Weekly overtime: a worked example
With weekly overtime, every hour over a set number in one workweek is paid at the overtime rate. A common threshold is 40 hours per week. In the United States, for example, federal law uses 40 hours in a workweek for employees who are covered.
- Hours worked 46
- Regular 40 × $20.00 = $800.00
- Overtime 6 × $30.00 = $180.00
- Total pay $980.00
Check the result another way: 46 hours at the plain rate is 46 × 20 = $920. The extra half for 6 overtime hours is 6 × 10 = $60. $920 + $60 = $980. Same answer. This second method is called the overtime premium method, and some payroll systems show it that way on the pay stub.
Overtime pay for 50 hours
Overtime pay for 50 hours works the same way. With a 40-hour threshold, 40 hours are regular and 10 are overtime. At $18 an hour: 40 × 18 = $720 regular, plus 10 × 27 = $270 overtime, for $990 in total pay.
Weekly overtime only works if you know the exact weekly total. Minutes count, and they must be converted correctly: 41 hours 45 minutes is 41.75 hours, so 1.75 overtime hours, not 1.45.
Need the weekly total first? Read how to calculate hours worked
Daily overtime vs weekly overtime
Some rules and contracts use daily overtime: hours over a set number in a single day, often 8, count as overtime even if the week stays under 40. This can give more overtime hours than a weekly rule for the same week.
- Mon 10h = 8 regular + 2 OT
- Tue 10h = 8 regular + 2 OT
- Wed 8h, Thu 8h = 16 regular
- Fri 4h = 4 regular
- Total 36 regular + 4 OT = 40h
Under a weekly 40-hour rule this week has no overtime at all. Under a daily 8-hour rule it has 4 overtime hours. At $18 an hour that is 36 × 18 = $648 plus 4 × 27 = $108, so $756 instead of $720.
When both a daily and a weekly rule apply, hours are normally not paid as overtime twice. Hours already counted as daily overtime are usually left out when checking the weekly limit. How exactly they combine depends on the rules where you work.
How to calculate double time
Double time is twice your hourly rate. Multiply the rate by 2, then by the double-time hours. Double time is less common than time and a half. It usually comes from a union agreement, a company policy, or specific rules for very long days, Sundays or public holidays.
- Rate $20.00, day of 12 hours
- Regular 8 × $20.00 = $160.00
- Time and a half 2 × $30.00 = $60.00
- Double time 2 × $40.00 = $80.00
- Total pay $300.00
The thresholds in that example are made up to show the math. Your own policy decides where each tier starts. The method is always the same: sort the hours into tiers, multiply each tier by its rate, add the results.
What counts toward the overtime rate
For a worker paid only a flat hourly rate, the overtime rate is simply that rate times 1.5. It gets more complicated when pay includes other parts, such as shift premiums, production bonuses or commissions.
In some places those extra payments must be blended into a higher regular rate before the overtime rate is worked out. In others they are not. This is one of the areas where the rules really differ, so check your contract or a local payroll adviser if your pay has several parts.
Overtime for salaried employees
If you are paid a salary but are eligible for overtime, you first need an hourly figure. A typical approach is weekly salary divided by the hours the salary is meant to cover. For example, $800 for a 40-hour week gives $20 an hour, so time and a half is $30. Whether a salaried role is eligible at all depends on local rules and the job itself.
How to check overtime on your pay stub
- Add up your hours for each day and for the week from your own record.
- Convert the totals to decimal hours.
- Split them into regular hours and overtime hours using the rule that applies to you.
- Multiply regular hours by your hourly rate.
- Multiply overtime hours by your overtime rate.
- Compare the total with the gross pay on your stub, before taxes.
Overtime is calculated on gross pay, before taxes and deductions. Your take-home pay for overtime will be lower than the gross figure, as with any other wages.
If the numbers do not match, look first at the hours, not the rate. Missed punches, a forgotten shift or minutes written as decimals cause most of the gaps.
Questions
How do you calculate overtime pay?
Multiply your hourly rate by 1.5 to get the overtime rate, then multiply it by your overtime hours. Add that to your regular hours times your normal rate. At $20 an hour with 5 overtime hours, overtime pay is 5 times $30, which is $150.
What is time and a half of $20?
Time and a half of $20 is $30 an hour. Multiply $20 by 1.5, or add half of $20, which is $10, to the original $20. For 8 overtime hours that is 8 times $30, or $240.
How much is overtime pay for 50 hours?
With overtime after 40 hours, 50 hours means 40 regular and 10 overtime hours. At $15 an hour that is $600 regular plus 10 times $22.50, or $225, overtime. Total gross pay is $825.
What is the difference between time and a half and double time?
Time and a half pays 1.5 times your hourly rate, while double time pays 2 times your rate. At $16 an hour, time and a half is $24 and double time is $32. Double time is usually set by contract or specific local rules.
Is overtime calculated daily or weekly?
It can be either, depending on where you work and your contract. Many places use a weekly limit such as 40 hours, and some also count hours over 8 in one day. Check the rules that apply to your job.
Is overtime taxed more than regular pay?
Overtime is added to your gross wages and taxed as part of your total pay. It can look like more tax is withheld because the paycheck is bigger, but the overtime pay formula itself works on gross pay, before any deductions.