How Overtime Pay Is Calculated — The Complete US Guide

The one rule everything hangs on: the workweek

Overtime in the United States is built on a single concept: the workweek. Under the Fair Labor Standards Act (FLSA), the federal law that governs overtime for most workers, a workweek is any fixed, recurring period of 168 hours — seven consecutive 24-hour days. Your employer chooses when it starts (many use Monday or Sunday), and it then stays fixed. Every overtime calculation is done inside one workweek, standing alone.

That design has a consequence workers often miss: hours are never averaged across weeks. A 50-hour week followed by a 30-hour week does not “balance out” to two 40-hour weeks. The first week contains 10 hours of overtime, full stop, even if both weeks appear on the same paycheck. Pay periods and workweeks are different things — the paycheck can cover two weeks, but the overtime math cannot.

If you are non-exempt — most hourly workers are — every hour you work beyond 40 in a workweek must be paid at one and a half times your regular rate. That is the whole federal rule. Everything else in this guide is about defining the two moving parts: what counts as hours worked, and what your “regular rate” actually is.

Step 1 — Add up the hours you actually worked

“Hours worked” is broader than time on the register. It generally includes:

• Time on your main duties, obviously — but also required training, mandatory meetings and work you take home with the employer's knowledge.
• Short rest breaks of about 5 to 20 minutes. Federal rules require these to be paid.
• Waiting time when you must stay available on site, travel between job sites during the day, and time spent putting on required protective gear.
• Work the employer “suffers or permits” — if your manager knows you stayed late to finish, those minutes are hours worked even if nobody approved them in advance.

What usually does not count: your normal commute, and a bona fide meal period of at least 30 minutes where you are fully relieved of duty. The meal break is the most contested line on American timesheets: if you eat at your station while watching the register, it is not an unpaid meal period, whatever the schedule says.

Step 2 — Find your real regular rate

The regular rate is not always your sticker hourly wage. Federal law defines it as all remuneration for the week divided by all hours worked that week. Non-discretionary bonuses (production, attendance, safety), shift differentials and most premiums must be folded in.

Example: you earn $18/hour plus a $2/hour night differential, and work 44 hours, all on nights. Your regular rate is $20, not $18 — so your 4 overtime hours are paid at $30 each, not $27. If your stub prices overtime off the base rate alone, the stub is wrong.

Some pay is excluded from the regular rate by law — true gifts, discretionary holiday bonuses, premium pay already paid at 1.5× for weekend work, and expense reimbursements. But the default assumption is that money connected to your work counts.

Step 3 — The formula, with worked examples

The formula: split the week's paid hours at 40. Gross = (40 × regular rate) + (overtime hours × regular rate × 1.5). Equivalently: pay all hours at the regular rate, then add a half-rate premium for the overtime hours — payroll departments use both forms and they must agree.

Example A — the basic case

Maria earns $18/hour and works 45 hours. Regular: 40 × $18 = $720. Overtime: 5 × $27 = $135. Gross: $855.

Example B — with a differential

Devon earns $20/hour plus a $2 differential on all hours and works 44 hours. Regular rate: $22. Regular pay: 40 × $22 = $880. Overtime: 4 × $33 = $132. Gross: $1,012.

Example C — a day-rate worker

A flat $200/day for five 10-hour days is $1,000 for 50 hours — an effective regular rate of $20/hour. The law then requires the extra half-time premium on the 10 overtime hours: 10 × $10 = $100 more, for a legal gross of $1,100. A day rate does not erase overtime.

Where state law changes the answer

Federal law is a floor, not a ceiling. Five states add daily overtime on top: California (1.5× after 8 hours in a day, 2× after 12, plus seventh-day rules), Alaska (after 8 in a day), Colorado (after 12 in a day or 12 consecutive hours), Nevada (after 8, only when your rate is under 1.5× the state minimum wage) and Oregon (after 10, in mills, factories and manufacturing). In those states you receive whichever computation — daily or weekly — benefits you more for each hour, never both premiums stacked.

Minimum wages are state business too: in 2026 they run from the federal $7.25 to $17.13 in Washington state and $18.40 in Washington, DC. Our overtime calculator by state applies each state's own rule and current minimum wage.

Exempt employees: who does not get overtime

The FLSA exempts whole categories of employees from overtime — most importantly bona fide executive, administrative and professional employees who meet both a duties test and a salary test, outside salespeople, many computer professionals, and teachers (whose exemption does not depend on the salary test). Job titles do not control: a “manager” who spends the week stocking shelves may be non-exempt in fact. Salaried does not automatically mean exempt, and hourly does not automatically mean non-exempt — but in practice most hourly workers are covered.

Six mistakes that cost workers money

• Pay-period averaging — overtime quietly spread across two weeks (see Example above; it is never allowed).
• Overtime priced off the base rate when differentials or bonuses should have raised the regular rate.
• Unpaid “off-the-clock” work — opening, closing, training and cleanup done outside recorded hours.
• Auto-deducted lunches subtracted even on days the break never happened.
• Misclassification — being labelled an independent contractor or an exempt “manager” while doing hourly-style work under the employer's control.
• Comp time instead of cash at private employers — outside government, future time off does not legally replace overtime pay.

The defense against all six is the same: keep your own record. Note your in/out times daily (a phone photo of the schedule plus your own log is enough), save every pay stub, and rebuild any suspicious week in a calculator like ours before you raise it — a specific, documented question gets fixed far more often than a general complaint.

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