Overtime Calculator

How Overtime Pay Works Under the FLSA

The Fair Labor Standards Act (FLSA) is the cornerstone federal law governing overtime pay in the United States. Enacted in 1938, the FLSA requires covered employers to pay non-exempt employees at least one-and-a-half times their regular rate of pay for every hour worked beyond 40 in a single workweek. This is commonly referred to as "time and a half."

A workweek is defined as any fixed, recurring period of 168 hours — seven consecutive 24-hour periods. It does not have to align with the calendar week. Importantly, the FLSA calculates overtime on a workweek basis, not a daily basis (though some states add daily overtime rules). Hours cannot be averaged across multiple weeks unless a specific exemption applies, such as the 8/80 rule for healthcare workers.

Time-and-a-Half Calculation

Calculating time-and-a-half overtime is straightforward: multiply your regular hourly rate by 1.5 to get the overtime rate, then multiply by the number of overtime hours worked. Here is the formula:

For example, a warehouse worker earning $20 per hour who works 50 hours in a week receives: ($20 x 40) + ($20 x 1.5 x 10) = $800 + $300 = $1,100 for the week. Their effective hourly rate for the week is $22/hour. Use our hourly to salary converter to see how overtime affects your annualized earnings.

Exempt vs. Non-Exempt Employees

Not all employees are entitled to overtime pay. The FLSA divides workers into two categories: exempt and non-exempt. Your classification depends on both your salary level and the type of work you perform.

The Salary Basis Test

To qualify as exempt, an employee must meet three conditions: (1) be paid on a salary basis, meaning they receive a guaranteed minimum amount each pay period regardless of hours worked; (2) earn at least $35,568 per year ($684 per week); and (3) perform exempt job duties as defined by the FLSA — typically executive, administrative, professional, computer, or outside sales work.

The duties test is often the trickiest part. A "manager" title alone does not make someone exempt. The employee must actually spend the majority of their time performing exempt duties, such as supervising at least two full-time employees (executive exemption) or exercising independent judgment on significant business matters (administrative exemption). Misclassification is one of the most common FLSA violations.

How Overtime Affects Your Taxes

Overtime pay is taxed as ordinary income — there is no special "overtime tax rate." However, because overtime increases your total earnings, it may push you into a higher federal income tax bracket. This is a marginal effect: only the income within the higher bracket is taxed at the higher rate, not your entire income.

For FICA purposes, overtime pay is treated identically to regular wages. Social Security tax (6.2%) applies up to the $176,100 wage base for 2026, and Medicare tax (1.45%) applies to all wages with no cap. If overtime pushes your total annual earnings above $200,000, the 0.9% Additional Medicare Tax kicks in on earnings above that threshold.

Significant overtime can increase your withholding disproportionately because your employer calculates withholding on each paycheck as if you earn that amount every period. A $1,500 paycheck with overtime may be withheld as if you earn $78,000 annually, even though your base salary is $52,000. This can result in over-withholding and a larger tax refund. Use our paycheck calculator to see the actual take-home impact.

State Overtime Laws

Several states have overtime rules that go beyond the federal FLSA requirements. When state and federal laws conflict, the rule most favorable to the employee applies.

Double-Time Rules

Double time means paying employees twice their regular hourly rate (2x). While the FLSA does not require double time, some states and union contracts mandate it under specific conditions. The most notable example is California, where double time is required after 12 hours worked in a single day and for all hours worked on the seventh consecutive day in a workweek.

For a California employee earning $25/hour who works a 14-hour shift: the first 8 hours are paid at $25/hour ($200), the next 4 hours at 1.5x ($150), and the final 2 hours at 2x ($100), totaling $450 for the day. Select "2x (Double Time)" in the calculator above to model double-time scenarios.

Comp Time: Compensatory Time Off

Compensatory time (comp time) is paid time off given in lieu of overtime pay. Under the FLSA, private-sector employers cannot offer comp time instead of overtime pay for non-exempt employees. This is a common misconception. If you work 45 hours in a week, your employer must pay you for 5 hours of overtime — they cannot simply give you 5 hours off the following week.

However, comp time is allowed for government employees (state and local). Public-sector workers can accrue up to 240 hours of comp time (480 for public safety and emergency response), earned at 1.5 hours per overtime hour worked. Salaried exempt employees in the private sector may informally receive comp time since they are not covered by FLSA overtime rules.

Calculating the Regular Rate for Salaried Non-Exempt Workers

Not all non-exempt employees are paid hourly. Some earn a salary but are still entitled to overtime. To calculate their overtime rate, divide the weekly salary by the number of hours the salary is intended to cover (typically 40) to find the regular rate, then multiply by 1.5.

For example, a non-exempt office assistant earning $600/week has a regular rate of $15/hour ($600 / 40). Their overtime rate is $22.50/hour ($15 x 1.5). If they work 48 hours, they earn $600 + ($22.50 x 8) = $780 for the week. Use our hourly to salary calculator to convert between pay structures.

Common Overtime Violations

The Department of Labor recovers hundreds of millions in back wages each year from FLSA violations. Common issues include:

• Misclassification: Calling workers "exempt" when their duties do not meet the FLSA test. A "supervisor" who spends 80% of their time doing non-supervisory work may not be truly exempt.
• Off-the-clock work: Requiring employees to check email, prepare before shifts, or clean up after clocking out. All hours "suffered or permitted" to work must be compensated.
• Averaging hours: Averaging 30 hours one week and 50 the next to claim no overtime. The FLSA requires weekly calculation — 10 hours of OT is owed for the 50-hour week.
• Improper rounding: While rounding to the nearest 5 or 15 minutes is allowed, always rounding down violates the law.
• Comp time in private sector: Offering time off instead of overtime pay to non-exempt private-sector employees is illegal under the FLSA.

Worked Example: Weekly Overtime Budget

Let us walk through a detailed example for a retail employee earning $18/hour who works 52 hours in a week:

Without overtime, this employee would earn $37,440 annually ($720 x 52 weeks). With consistent 12-hour overtime weeks, their annual earnings jump to $54,288 — a 45% increase. However, the additional earnings are subject to regular income tax, so the actual take-home increase is somewhat less.

Tips for Employees and Employers

• Track your hours: Keep a personal record of hours worked, including start/end times and breaks. This is essential evidence if an overtime dispute arises.
• Know your state law: If you live in California, Alaska, Nevada, or Colorado, you may be entitled to daily overtime in addition to weekly overtime.
• Check your classification: If you are salaried and earn under $35,568/year, you are almost certainly non-exempt and entitled to overtime regardless of your job title.
• Understand tipped overtime: Tipped employees must receive overtime based on the full minimum wage, not the lower tipped wage. Use our tip calculator to understand tipped income.

Industry-Specific Overtime Rules

Certain industries have unique overtime provisions under the FLSA and state laws. Healthcare workers may be covered by the 8/80 rule, which allows hospitals to use a 14-day work period instead of a 7-day workweek. Under this arrangement, overtime is owed after 8 hours in a day or 80 hours in the 14-day period, whichever results in more overtime pay.

Agricultural workers have historically been exempt from federal overtime requirements, though some states (like California and New York) have phased in overtime protections for farm workers. Truck drivers subject to Department of Transportation regulations are exempt from FLSA overtime, as are certain railroad, airline, and motor carrier employees. Retail and service employees paid on commission may be exempt from overtime if more than half their total earnings come from commissions and their regular rate exceeds 1.5 times the applicable minimum wage.

Overtime and Financial Planning

Regular overtime can significantly boost your annual income, but it is important to plan for the tax implications and long-term financial impact. If overtime pushes your annual earnings into a higher tax bracket, the additional income in that bracket is taxed at the higher marginal rate. However, this never makes overtime "not worth it" — you always take home more money after taxes.

Consider directing a portion of your overtime earnings toward long-term financial goals. Extra income from overtime can accelerate mortgage payoff (use Amortio's mortgage calculator to see the impact of extra payments), build an emergency fund, or increase retirement contributions. Even directing $200/month from overtime into a 401(k) reduces your taxable income while building wealth.

How Overtime Impacts Your Retirement and Benefits

Overtime income can have ripple effects on other aspects of your compensation. For 401(k) contributions, if your contribution is set as a percentage of gross pay, your employer will deduct the same percentage from overtime earnings — which can help you reach the $23,500 annual contribution limit faster. Some employers match contributions on overtime pay, while others limit matching to base salary only.

For Social Security benefits, overtime earnings increase your career average earnings, which can result in higher Social Security payments in retirement. The Social Security Administration uses your highest 35 years of earnings to calculate benefits, so years with significant overtime can boost your lifetime average. However, earnings above the $176,100 wage base (2026) do not count toward Social Security benefits.

Overtime can also affect eligibility for certain income-based benefits. Consistent overtime that pushes your household income above threshold limits may disqualify you from Medicaid, CHIP, subsidized health insurance premiums under the ACA, or certain housing programs. Consider the total financial picture when deciding whether to pursue or accept overtime opportunities.

The 2026 Overtime Salary Threshold Update

The Department of Labor periodically updates the salary threshold for overtime exemption. The current threshold is $35,568 per year ($684 per week). Employees earning below this amount are automatically eligible for overtime regardless of job duties. Proposed increases would have raised this threshold significantly, but court challenges have kept the current level in place for 2026.

If you earn close to the threshold, even a small salary increase could change your overtime eligibility. Some employers strategically set salaries just above the threshold to avoid paying overtime, which is legal as long as the employee's duties genuinely meet the exempt criteria. If you suspect your employer raised your salary solely to avoid overtime while your duties remain non-exempt, consult with an employment attorney.

For workers earning between $35,568 and $50,000, converting from hourly-with-overtime to exempt salaried status can result in lower total compensation if you regularly work more than 40 hours. Before accepting a salaried position, calculate your current total earnings including overtime using the calculator above and compare it to the offered salary. Use our hourly to salary converter to run these comparisons quickly.

Overtime for Remote and Hybrid Workers

The rise of remote work has created new complexities for overtime tracking. When employees work from home, accurately recording start and stop times becomes more challenging. The FLSA still requires employers to track and compensate all hours worked by non-exempt employees, regardless of where the work is performed. Checking work email, responding to messages, or completing tasks outside scheduled hours all count as compensable time.

Employers must establish clear policies for remote overtime, including pre-approval requirements and time tracking procedures. If you are a non-exempt remote worker who regularly performs work outside your scheduled hours, those hours must be recorded and compensated at the overtime rate if they push you past 40 hours in a workweek. Failure to report these hours does not absolve your employer of the obligation to pay — the FLSA places the burden on the employer to track time, not the employee.

Remote workers who live in states with daily overtime rules (like California) face additional considerations. If you work from home in California for an employer based in Texas, California's daily overtime rules still apply to you. This means overtime after 8 hours in a day and double time after 12 hours — regardless of your employer's home state policies. Understanding which state's laws govern your overtime can make a significant difference in your take-home pay, so check with your state labor department or use Salario for salary comparisons across states.

Overtime Pay vs. a Second Job

If you need additional income, you might consider whether overtime at your current job or a second job is more financially advantageous. Overtime pays at least 1.5x your regular rate, while a second job typically pays at 1x a separate rate. For a worker earning $25/hour, overtime pays $37.50/hour — so unless the second job pays more than $37.50/hour, overtime is the better financial choice.

However, there are other factors to consider. A second job may offer different skills development, networking opportunities, or flexibility. Second-job income may also have lower FICA costs if you have already exceeded the Social Security wage base at your primary job. From a purely financial standpoint, run both scenarios through the calculator and compare the projected monthly and annual earnings, then factor in commute time, work-life balance, and long-term career goals.

Keep in mind that both overtime and second-job earnings are taxed as ordinary income. Neither receives special tax treatment. Use our income tax calculator to estimate the after-tax impact of either option on your total annual take-home pay.

If you decide overtime is the better route, negotiate with your employer for consistent overtime schedules so you can budget reliably around the additional income. Many workers find that consistent overtime is easier to manage than juggling two separate employers with different schedules, tax withholding, and benefits. Either way, the overtime calculator above helps you project your total weekly, monthly, and annual earnings so you can make informed decisions about your time and compensation.

Overtime Rights: What to Do If Your Employer Violates the Law

If you believe your employer is not paying required overtime, you have several options. First, document everything — keep detailed records of hours worked, pay stubs, and any communications about overtime. Second, raise the issue with your employer's HR department in writing. Many violations are unintentional and can be resolved internally.

If internal resolution fails, you can file a complaint with the US Department of Labor's Wage and Hour Division (WHD). Complaints can be filed online, by phone, or in person at a local WHD office. The FLSA protects you from retaliation — your employer cannot fire, demote, or discipline you for filing a complaint. You may also pursue a private lawsuit to recover up to 2 years of unpaid overtime (3 years for willful violations), plus an equal amount in liquidated damages and attorney fees.

The statute of limitations for FLSA claims is 2 years from the date of the violation (3 years for willful violations). Do not wait too long to take action, as you may lose the ability to recover older unpaid wages. Many employment attorneys take overtime cases on a contingency basis, meaning you pay nothing upfront.

Related Calculators and Tools

Overtime pay is just one piece of your compensation picture. Use these related tools to understand your full earnings and tax impact:

• Paycheck Calculator — See your actual take-home pay after taxes and deductions, including overtime earnings.
• Income Tax Calculator — Estimate how overtime income affects your total federal tax liability for the year.
• Hourly to Salary Calculator — Convert your hourly rate (with or without overtime) to an annualized salary figure.
• Tip Calculator — Calculate tips and understand how tipped wages interact with overtime requirements.
• Salario Salary Tools — Compare hourly wages, salaries, and total compensation across different jobs and cities.
• Calorique Health Tools — Track calories and nutrition to maintain energy during long overtime shifts.
• Amortio Mortgage Calculator — See how directing overtime income toward extra mortgage payments can save thousands in interest.