The federal overtime rule
Overtime hours = hours worked in workweek − 40 (if positive)
Under the Fair Labor Standards Act (FLSA), non-exempt employees are paid 1.5× their regular hourly rate for any hours worked over 40 in a single workweek. The workweek is a fixed, recurring 7-day period defined by the employer.
Step-by-step
- 1
Total hours actually worked
Add up all hours actually worked in the workweek. Exclude paid time off, holidays, and unpaid lunches. - 2
Subtract 40
If the total is over 40, the excess is overtime. 46 worked − 40 = 6 overtime hours. - 3
Calculate the overtime rate
Overtime rate = regular hourly rate × 1.5. At $20/hour, overtime = $30/hour. - 4
Pay regular hours separately
40 × $20 = $800 regular pay. 6 × $30 = $180 overtime pay. Total = $980 gross. - 5
Apply state daily overtime if applicable
States like California also require 1.5× over 8 hours/day and 2× over 12 hours/day. Check your state rules.
Pay rate reference
| Regular rate | Time and a half (1.5×) | Double time (2×) |
|---|---|---|
| $15.00 | $22.50 | $30.00 |
| $18.00 | $27.00 | $36.00 |
| $22.00 | $33.00 | $44.00 |
| $28.00 | $42.00 | $56.00 |
| $35.00 | $52.50 | $70.00 |
Worked example
An employee earns $24/hour and worked 47 hours in one week:
- Regular: 40 × $24 = $960.00
- Overtime: 7 × ($24 × 1.5) = 7 × $36 = $252.00
- Total gross pay: $1,212.00
Common overtime mistakes
- Averaging two weeks together. Even on biweekly pay, overtime is calculated per workweek, not per pay period.
- Counting PTO toward 40 hours. Paid leave is generally not "hours worked" for overtime purposes.
- Forgetting daily overtime in some states. California, Alaska, Nevada, and a few others have daily rules.
- Misclassifying non-exempt as exempt. Job title alone does not make someone overtime-exempt.
Step-by-step weekly overtime
- List the hours worked each day in the workweek.
- Subtract unpaid meal breaks from each day.
- Sum the daily totals to get weekly hours worked.
- If the weekly total is 40 or less, there is no FLSA overtime.
- If the weekly total is over 40, the hours above 40 are overtime hours.
- Multiply overtime hours by 1.5 times the regular rate of pay to get overtime pay.
Run the same numbers through the Overtime Calculator to verify your work.
What counts toward the 40-hour threshold
Only hours actually worked count toward the 40-hour overtime trigger. PTO, paid holiday, paid sick leave, and bereavement leave are paid hours, but they do not count as hours worked for overtime. An employee who takes 8 hours of vacation and then works 36 hours has 36 hours worked, not 44, so no overtime is owed under FLSA even though the pay stub shows 44 paid hours.
Daily overtime states
Some states require overtime after 8 hours in a day in addition to the federal weekly rule. California, Alaska, and Nevada are the most prominent. Colorado adds daily overtime over 12 hours. In these states you calculate daily overtime first, then check whether weekly overtime applies on top of any remaining straight-time hours.
Worked example with both daily and weekly rules
A California employee works 10 hours on Monday, 10 hours on Tuesday, 10 hours on Wednesday, and 8 hours on Thursday. Total: 38 hours.
- Daily OT: 2 hours each on Mon, Tue, Wed = 6 hours at 1.5×.
- Weekly OT: 0 (total is below 40, and the 6 daily OT hours have already been paid at 1.5×).
- Straight time: 32 hours at the regular rate.
Even though the weekly total is below 40, this employee earns 6 hours of overtime because California's daily rule applies. Always check daily rules in your state before assuming the FLSA weekly rule alone determines overtime.
Important note
Overtime rules vary by federal law, state law, employer policy, and union contract. Always confirm specific overtime calculations with your employer, payroll provider, or HR department.