How Overtime Pay Is Calculated: Time-and-a-Half Worked Through
Overtime is pay for hours worked beyond a set limit, usually at a higher rate than your normal wage. The most common version is time and a half: each overtime hour earns 1.5 times the regular hourly rate. The arithmetic is simple, but the details trip people up: which hours count, what the regular rate includes, and what to do if you are salaried.
Rules differ by country, by region and by type of job, and employment contracts can add their own terms. In the United States, for example, the federal rule for covered employees is 1.5 times the regular rate for hours over 40 in a workweek, and some states also look at hours per day. This article explains the math, not what applies to you.
The basic formula
gross pay = regular hours × rate + overtime hours × rate × multiplierGross pay is before any tax or deductions.
Worked example: you earn $18 an hour and work 46 hours in a week, with overtime starting after 40. Regular pay is 40 × 18 = $720. The overtime rate at time and a half is 18 × 1.5 = $27, and 6 hours at that rate is 6 × 27 = $162. The total is 720 + 162 = $882. Without the premium, the same 46 hours would have paid only 46 × 18 = $828.
| Multiplier | Common name | Overtime rate on an $18 wage |
|---|---|---|
| 1.25 | Time and a quarter | $22.50 |
| 1.5 | Time and a half | $27.00 |
| 2 | Double time | $36.00 |
What counts as the regular rate
Your regular rate is not always the number written in your contract. Under many rules, including the US federal approach, extra payments such as shift differentials and non-discretionary bonuses (promised in advance or tied to targets) are folded into the regular rate, while genuine gifts and some other payments are not. When they apply, the regular rate is the week's qualifying pay divided by the hours worked.
Worked example: you work 46 hours at $18 and also earn a $92 non-discretionary bonus that week. Pay before any premium is 46 × 18 + 92 = $920, so the regular rate is 920 ÷ 46 = $20.00. Every hour has already been paid at the regular rate, so only the extra half is owed on the 6 overtime hours: 0.5 × 20 × 6 = $60. The total is 920 + 60 = $980.
Check it a second way: 40 × 20 + 6 × 30 = 800 + 180 = 980. The bonus raised the weekly total by $98, not just $92, because it also raised the overtime rate.
Overtime when you are salaried
Being salaried does not automatically mean you are excluded from overtime. It depends on your duties, your pay level and local law. If your salary is meant to cover a fixed number of hours, you can turn it into an hourly rate to see what extra hours would be worth.
Worked example: a weekly salary of $1,040 that covers 40 hours is 1,040 ÷ 40 = $26 an hour. Five overtime hours at time and a half are 5 × 26 × 1.5 = $195. The salary to hourly calculator gives the hourly rate from a yearly, monthly, bi-weekly or weekly salary once you enter the hours it covers. It also takes paid holidays and vacation days off the hours worked, and starts with 10 holidays and 15 vacation days filled in, so the same $1,040 comes out at $28.76 an hour. Set both fields to 0 to get the plain $26.
Overtime is often counted by the week
Where the threshold is weekly, hours are measured one week at a time, not across the whole pay period. Take a two-week period with 80 hours in total. If the first week had 50 hours and the second had 30, the first week still contains 10 overtime hours even though the period averages exactly 40 a week.
That is why a total of 80 hours on a biweekly pay slip does not prove there was no overtime. Check how your employer defines the workweek and where it starts.
Checking your pay slip
- Total your own hours for each week. The work hours timesheet calculator adds up clock-in and clock-out times for you, and our guides to hours between two times and minutes to decimal hours cover the manual method.
- Split each week into regular and overtime hours using the threshold in your contract or local rules.
- Multiply each part by the right rate and add them, including any bonus that belongs in the regular rate.
- Compare your total with the gross pay on the slip. A small gap can come from rounding or a different workweek boundary, and a large one is worth raising with payroll.
For the hourly basics behind step 3, see hourly versus salary pay. The hourly to salary calculator shows what a regular wage adds up to over a full year, which helps when you are deciding whether a job with frequent overtime is worth it.
This article is general education about arithmetic, not employment, tax or legal advice. Overtime rules and exemptions vary by place and job, so check your contract and local regulations.
- Time Card Calculator: Pick a period of one to 31 days, enter when you clocked in, clocked out and how long you took for breaks, and the calculator totals your hours. Add an hourly rate and an overtime rule to see regular, overtime and gross pay.
- Salary to Hourly Calculator: Enter what you earn, how often you are paid and how much time you really work, and the calculator returns the equivalent hourly, daily, weekly, monthly and yearly figures.
- Hourly to Salary Calculator: Type in your hourly rate and your usual schedule. The calculator turns it into yearly, monthly, weekly and daily pay, taking unpaid holidays and vacation days off the total.
This article is general information, not professional advice. See our Disclaimer and Editorial Policy.
More articles
15-Year vs 30-Year Mortgage: Payment, Interest and Trade-offs
A shorter mortgage costs far less in interest but asks for a much higher monthly payment. A side-by-side example shows the size of both effects.
APR vs APY: What the Two Rates Really Tell You
APR and APY are two ways to quote the same rate. One ignores compounding and one includes it, and mixing them up can make a worse deal look better.
APR vs Interest Rate: What the Difference Means for a Loan
A loan with the lower interest rate is not always the cheaper loan. The APR folds in certain fees so offers can be compared, and a worked example shows how.