How to Calculate US Overtime Pay
Under the Fair Labor Standards Act (FLSA), most US non-exempt hourly workers are entitled to overtime pay at 1.5 times their regular rate for all hours worked beyond 40 in a single workweek. This is not negotiable by employer policy — it is a federal legal minimum. States can and do expand overtime protections: California, for example, requires 1.5× after 8 hours in a single day (not just after 40 per week), and 2× double time after 12 hours in a day. Alaska, Nevada, and Colorado also have daily overtime rules. Always check your state labor board's regulations, as state law supersedes FLSA where it provides greater protections.
To calculate overtime pay, first determine your regular rate (your standard hourly wage). Your overtime rate is 1.5× that figure. Multiply your regular hours (up to 40) by the regular rate, then multiply overtime hours by the overtime rate, and add both totals. This calculator also supports double time (2×) — common in some union contracts and California daily overtime — and a custom multiplier for any negotiated overtime arrangement. The annual projection section shows how consistent overtime over a set number of weeks translates to total annual compensation, which is critical for budgeting and understanding the true value of accepting extra shifts. Note that federal income tax, Social Security, and Medicare apply to overtime pay at the same rates as regular wages — overtime is not tax-free, but the additional income is significant at the marginal rate.
Frequently Asked Questions
Under the FLSA, "non-exempt" employees — generally those paid hourly or salaried below $684/week ($35,568/year) — must receive 1.5× overtime for hours over 40/week. "Exempt" salaried employees (executive, administrative, professional, computer, and outside sales exemptions) are not entitled to federal overtime. Many states have additional exemptions and protections. When in doubt, consult your state's Department of Labor or an employment attorney.
Private-sector employers covered by FLSA generally cannot substitute compensatory time off ("comp time") for required overtime pay — they must pay cash. State and local government employers may offer comp time at 1.5 hours per overtime hour worked under specific FLSA agreements. Some states (California notably) prohibit comp time arrangements even more broadly. If your private employer offers comp time instead of overtime pay, this may violate federal law and should be reported to the Department of Labor Wage and Hour Division.
Overtime income is not taxed at a uniquely higher rate — it's simply added to your regular wages and taxed within the same progressive federal bracket system. However, because overtime pushes your total income higher, it may move some of that income into a higher marginal bracket. Additionally, employers sometimes withhold federal income tax from supplemental wages (including overtime) at the flat supplemental rate of 22% (2025), which may result in overwithholding that gets refunded when you file your W-2 return.