Overtime Calculator: Figure Out Overtime Pay Fast

If you run payroll for even one employee, sooner or later someone works past 40 hours and you have to get the math right. Get it wrong and you underpay a worker or overpay from your own pocket. This guide gives you a simple overtime calculator method you can run in your head or in a spreadsheet, plus the federal rules that decide who actually qualifies.

How do I calculate overtime pay?

The short answer: overtime pay equals the employee's regular hourly rate multiplied by 1.5, times the number of hours worked over 40 in a single workweek.

Under the federal Fair Labor Standards Act (FLSA), covered non-exempt employees must be paid at least one and one-half times their regular rate of pay for every hour worked beyond 40 in a fixed, seven-day workweek. This is where "time and a half" comes from.

Here is the core overtime calculator formula:

Overtime pay = Regular hourly rate × 1.5 × Overtime hours
Total pay    = (Regular rate × 40) + Overtime pay

Three things decide the number:

1. The regular hourly rate - what the worker earns per hour before overtime.
2. The overtime multiplier - 1.5 under federal law (some states require more in specific cases).
3. Overtime hours - hours worked over 40 in one workweek, not per day, and not per pay period.

A worked example for hourly employees

Say Maria earns $20 an hour and works 46 hours in one week.

• Regular pay: 40 hours × $20 = $800
• Overtime rate: $20 × 1.5 = $30 per hour
• Overtime pay: 6 hours × $30 = $180
• Total weekly pay: $980

That is the entire calculation for a standard hourly worker. The overtime premium here is the extra $10 per hour on top of the base $20 for those six hours.

How to calculate overtime for salaried employees

Salaried does not automatically mean exempt from overtime. If a salaried employee is non-exempt, you still owe overtime, and the math takes one extra step: you first convert the salary into an hourly regular rate.

1. Find the weekly salary (annual salary ÷ 52).
2. Divide the weekly salary by the number of hours it is meant to cover to get the regular hourly rate.
3. Apply the standard formula above.

Example: a non-exempt employee earns a $780 weekly salary for a 40-hour week and works 45 hours.

• Regular rate: $780 ÷ 40 = $19.50/hour
• Overtime rate: $19.50 × 1.5 = $29.25/hour
• Overtime pay: 5 hours × $29.25 = $146.25
• Total: $926.25

If you employ salaried staff, our companion guide on how to do payroll walks through the full pay run so overtime slots in cleanly.

Don't forget bonuses and commissions

This is where employers most often trip up. The "regular rate" is not always just the base hourly wage. According to the U.S. Department of Labor, the regular rate includes most nondiscretionary bonuses, commissions, and shift differentials - anything the employee earns for their work that is not specifically excluded by law.

To account for it, add the extra earnings to the week's straight-time pay, then divide by total hours worked to find the true regular rate before applying the 1.5 multiplier.

Example: an employee earns $800 in base wages for 45 hours plus a $100 production bonus.

• Total straight-time pay: $800 + $100 = $900
• Regular rate: $900 ÷ 45 hours = $20/hour
• Overtime premium owed: 5 hours × ($20 × 0.5) = $50
• Total pay: $900 + $50 = $950

Discretionary bonuses (true surprises with no promise attached) can generally be excluded. When in doubt, treat a bonus as nondiscretionary.

Who actually qualifies for overtime?

Before you calculate anything, confirm the worker is non-exempt. The FLSA splits employees into two groups:

• Non-exempt - entitled to overtime. Most hourly workers fall here.
• Exempt - not entitled to overtime. To be exempt, an employee generally must be paid on a salary basis above a set threshold and perform specific executive, administrative, or professional duties.

As of 2026, the federal salary threshold for the standard exemption sits at $684 per week ($35,568 per year), and both the salary test and the duties test must be met for an exemption to be valid. Paying someone a salary alone does not make them exempt - the job duties matter just as much.

Misclassification is one of the most expensive payroll mistakes a small business can make, because back pay and penalties stack up per employee. If you are hiring, sort classification out early - our guide on how to hire employees covers the paperwork side.

Quick overtime calculator reference table

Every row uses the same formula: regular pay for the first 40 hours, then 1.5× the regular rate for each hour above 40.

Common mistakes to avoid

• Averaging two weeks together. Overtime is calculated per workweek. You cannot offset a 30-hour week against a 50-hour week.
• Using daily thresholds where they don't apply. Federal law triggers overtime at 40 weekly hours, not 8 daily hours - but some states (like California) add daily rules, so check your state.
• Leaving bonuses out of the regular rate. As shown above, nondiscretionary pay must be folded in.
• Assuming salaried equals exempt. It does not.
• Not tracking hours accurately. Your calculation is only as good as your timekeeping. Pairing this with an employee time clock calculator keeps the raw hours clean before you ever run the formula.

Where overtime fits in your bigger payroll picture

Overtime is one line in a larger cost stack that also includes wages, benefits, and taxes. Once you know your overtime numbers, factor them into total labor cost - and remember they interact with what you owe on the employer side, which we cover in what is payroll tax. Budgeting labor properly is a core part of running any business, whether you are figuring out how to start a business or scaling an existing team.

Conclusion

Calculating overtime does not have to be intimidating. Confirm the employee is non-exempt, find the true regular rate (including nondiscretionary bonuses), multiply it by 1.5, and apply it to every hour worked past 40 in the week. Run those four steps and your numbers will hold up.

Ready to put it into practice? Plug your own figures into the formula above, and lean on our payroll guide to wire overtime into your regular pay runs.

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Sources: U.S. Department of Labor - Fact Sheet #23: Overtime Pay Requirements of the FLSA, DOL Fact Sheet #56A: Regular Rate of Pay, DOL Fact Sheet #56C: Bonuses under the FLSA. This article is for general information and is not legal or tax advice; verify current thresholds and state rules before running payroll.