Time and a Half: How Overtime Pay Actually Gets Calculated
Overtime is 1.5 times your regular rate after 40 hours in a workweek — but "regular rate" includes more than base pay, the workweek is not the calendar week, and exemption rules decide who gets it at all.
Published · Paycheck & Income · 2 min read
Federal law sets the floor: non-exempt employees earn at least 1.5 times their regular rate for hours beyond 40 in a workweek. Every phrase in that sentence carries weight, and misreading any of them is how workers get quietly shorted.
"Regular rate" is more than base pay
The overtime multiplier applies to a rate that must include most non-discretionary extras: shift differentials, production bonuses, commissions. A worker at $20/hour who earned a $100 attendance bonus that week has a regular rate above $20, and the overtime premium must be computed on the higher figure. Employers who pay 1.5 × base while ignoring bonuses are underpaying — one of the most common wage violations found in audits.
The workweek is fixed, not floating
Overtime counts within a fixed, recurring 168-hour workweek the employer defines — not the pay period. On a biweekly paycheck, 45 hours one week and 35 the next is not 80 hours with no overtime: the first week owes 5 overtime hours regardless of the second. Averaging across weeks is not allowed for most employees. Similarly, federal law does not require daily overtime — a 12-hour Tuesday inside a 38-hour week earns none — though some states, notably California, add daily rules on top.
Exempt vs. non-exempt: who gets overtime at all
Salaried does not mean exempt. Exemption requires passing both a salary threshold and a duties test — executive, administrative, professional, and certain other roles genuinely exercising independent judgment. A salaried coordinator doing routine work below the duties bar is owed overtime despite the salary. Job titles decide nothing; duties do.
Overtime and your taxes
A heavy-overtime check often gets withheld as if that pace were year-round, making the overtime look punitively taxed. It is not — the annual return trues it up, exactly as with bonuses. Overtime dollars are ordinary wages taxed at your ordinary marginal rate.
The overtime pay calculator computes the premium from your actual rates and hours, and the take-home pay calculator shows what a big-overtime check nets after the withholding tables do their annualizing.
Run your own numbers
More on paycheck & income
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- The Hourly-to-Salary Conversion Everyone Gets Slightly Wrong
- The Three-Paycheck Month: A Built-In Windfall Twice a Year
This article is general education, not tax, legal, investment, or financial advice. Figures used in examples are illustrations, not quotes or predictions. For decisions that depend on your full situation, talk to a qualified professional.