How Is Overtime Pay Calculated?
The standard overtime formula under the Fair Labor Standards Act (FLSA) is: Overtime Pay = Regular Hourly Rate x 1.5 x Overtime Hours. For a worker earning $24/hour who works 48 hours in a week, the calculation is: 40 regular hours at $24 ($960) plus 8 overtime hours at $36 ($288), for a total weekly pay of $1,248.
Dana Kowalski runs a construction company in Pinewood Falls and manages overtime carefully. Her lead carpenter earns $32/hour. During a rush to finish a deck before the rainy season, the carpenter worked 55 hours in one week. Dana calculated: 40 hours at $32 ($1,280) plus 15 hours at $48 ($720) = $2,000 for the week. That single week of overtime added $720 beyond the normal $1,280 paycheck. Dana uses the salary to hourly calculator to convert annual budgets into hourly costs when planning project timelines.
For salaried non-exempt employees, first convert the salary to an hourly rate. Divide the annual salary by 2,080 (40 hours x 52 weeks). A $45,000 salary equals $21.63/hour, making the overtime rate $21.63 x 1.5 = $32.45/hour.
Federal vs. State Overtime Rules
Federal law sets the floor: overtime kicks in after 40 hours per work week at 1.5x the regular rate. But several states go further with daily overtime thresholds or double-time requirements.
- California: Overtime after 8 hours/day at 1.5x; double time after 12 hours/day or after 8 hours on the 7th consecutive work day
- Alaska: Overtime after 8 hours/day at 1.5x
- Colorado: Overtime after 12 hours/day or 40 hours/week at 1.5x
- Nevada: Overtime after 8 hours/day at 1.5x (if hourly rate is below 1.5x minimum wage)
Marco Ferreira, who owns a restaurant in Pinewood Falls, had to learn overtime rules when he opened a second location in a neighboring state with daily overtime thresholds. A line cook earning $18/hour who works a 10-hour shift in California earns: 8 hours at $18 ($144) plus 2 hours at $27 ($54) = $198 for the shift. In a state with only weekly overtime, that same 10-hour shift pays a flat $180. Marco uses a percentage calculator to figure the cost increase that daily overtime adds to his labor budget.
Overtime Pay Reference Table
The table below shows overtime rates and weekly earnings at different base hourly rates, assuming 40 regular hours plus varying overtime hours at the 1.5x rate.
| Hourly Rate | OT Rate (1.5x) | 5 OT Hours | 10 OT Hours | 15 OT Hours | 20 OT Hours |
|---|---|---|---|---|---|
| $15.00 | $22.50 | $712.50 | $825.00 | $937.50 | $1,050.00 |
| $20.00 | $30.00 | $950.00 | $1,100.00 | $1,250.00 | $1,400.00 |
| $25.00 | $37.50 | $1,187.50 | $1,375.00 | $1,562.50 | $1,750.00 |
| $30.00 | $45.00 | $1,425.00 | $1,650.00 | $1,875.00 | $2,100.00 |
| $35.00 | $52.50 | $1,662.50 | $1,925.00 | $2,187.50 | $2,450.00 |
| $40.00 | $60.00 | $1,900.00 | $2,200.00 | $2,500.00 | $2,800.00 |
| $50.00 | $75.00 | $2,375.00 | $2,750.00 | $3,125.00 | $3,500.00 |
Source: Calculated using FLSA overtime formula. Total = (40 x hourly rate) + (OT hours x 1.5 x hourly rate).
Each column shows total weekly gross pay (40 regular hours + overtime hours). For example, a $25/hour worker doing 10 hours of overtime earns (40 x $25) + (10 x $37.50) = $1,375.
How Overtime Affects Your Annual Earnings
Consistent overtime dramatically increases annual income. A worker earning $22/hour with just 5 overtime hours per week adds $8,580 to their annual earnings: 5 hours x $33 x 52 weeks = $8,580. Their total annual jumps from $45,760 to $54,340, an 18.75% increase.
When evaluating whether overtime is worth it for your situation, consider the net pay after taxes. Because overtime pushes your weekly and annual income higher, more of that income may fall into a higher tax bracket. A worker in the 22% federal bracket keeps $23.40 of a $30 overtime hour after federal tax alone. After state tax, Social Security, and Medicare, the take-home is closer to $20-$22 of that $30. Still a meaningful increase, but not the full 1.5x premium many workers expect on their paychecks.
Convert your total earnings to an annual salary with our hourly to salary calculator, or see how those extra earnings could grow in a savings account or through compound interest.
This calculator provides general estimates based on federal FLSA rules. Overtime laws vary by state and may include daily thresholds, double-time requirements, or exemptions for specific industries. Consult your state labor department or an employment attorney for guidance specific to your situation.