How overtime pay works
Under the federal Fair Labor Standards Act, non-exempt employees earn at least 1.5× their regular rate for hours beyond 40 in a workweek. At $20/hour, your overtime rate is $30, so a 45-hour week pays $800 regular + $150 overtime = $950 — those five extra hours pay like seven and a half.
Worth knowing before you count on it
- The workweek is the unit. Federal overtime counts hours per workweek, not per day or pay period — 45 hours one week and 35 the next is 5 OT hours, even though the biweekly total is 80.
- Some states go further. California adds daily overtime (past 8 hours in a day) and double time (past 12). Check your state's rules if your schedule runs long days rather than long weeks.
- "Salaried" doesn't automatically mean "no overtime." Exemption depends on your duties and salary level. Misclassification is one of the most common wage violations — if you're salaried but doing hourly-style work at modest pay, it's worth reading up on your state's rules.
Frequently asked
How is overtime pay calculated?
Overtime pay = your regular hourly rate × the overtime multiplier × overtime hours. Under US federal law (the FLSA), non-exempt employees earn at least 1.5× their regular rate for hours worked beyond 40 in a workweek.
Who qualifies for overtime?
Most hourly (non-exempt) employees qualify under federal law. Many salaried workers are exempt, but exemption depends on duties and salary level, not just being paid a salary. Some states add daily overtime rules — California, for example, requires overtime after 8 hours in a single day.
Is overtime taxed at a higher rate?
No — overtime dollars are taxed like all your other income. A bigger paycheck can have more tax withheld upfront, which creates that impression, but it evens out when you file. There is no special overtime tax rate.
What is double time?
Double time is 2× your regular rate. Federal law doesn't require it, but some states and union contracts do — for example, California requires double time past 12 hours in a day. Set the multiplier to 2 to calculate it.