How overtime pay works in the US: time and a half explained

Overtime is extra pay for working long weeks. The federal rule is simple to state, but who it covers and how the rate is set is where people get caught out. This guide covers the basics; it is general information, not legal advice.

The federal rule

Under the Fair Labor Standards Act (FLSA), covered non-exempt employees must be paid at least one and a half times their regular rate for each hour worked over 40 in a workweek. A workweek is a fixed, recurring period of seven days, and each week is counted on its own: you cannot average 50 hours one week and 30 the next to avoid overtime.

How time and a half is calculated

overtime rate = regular rate x 1.5
weekly pay    = regular hours x rate + overtime hours x overtime rate

At $20 an hour and 45 hours worked, the first 40 hours pay $800 and the 5 overtime hours pay 5 x $30 = $150, for $950 in total. The overtime pay calculator does this with your own rate and hours.

The "regular rate" is not always your base wage

The regular rate can include more than the hourly wage, such as non-discretionary bonuses and shift differentials. If you receive these, your overtime rate may be higher than 1.5 times your base wage. Check the earnings breakdown on your payslip.

Exempt and non-exempt employees

Some employees are exempt from the federal overtime rule. Exemption depends on the duties of the job and the salary paid, not on the job title or on being paid a salary. Many salaried workers are non-exempt and are owed overtime. The US Department of Labor publishes the current tests on its website.

State rules can be stricter

Where state law gives more protection than federal law, the more protective rule applies. California, for example, requires overtime pay for hours over 8 in a day as well as over 40 in a week, and double time after 12 hours in a day. Check your state labor department for the exact rule.

Holidays and weekends

Federal law does not require a premium for working holidays or weekends. Extra pay for those days comes from an employer's policy, a union agreement or a contract. Hours on those days still count toward the 40-hour total. See the time and a half calculator for the rates.