How to Calculate Overtime Hours and Pay

Forty hours come and go, and the shift keeps running. Somewhere around hour 41, the pay math changes: instead of the usual rate, every additional hour is worth more. That's overtime, and while the concept is simple, getting the actual number right takes a few more steps than just multiplying hours by rate.

This guide covers how overtime hours get identified and how the pay itself is calculated — the threshold, the rate, the formula, and the trickier cases like a pay rate that changes mid-week. It assumes you already have an accurate hour count for the period; if you're still working that out, the hours-worked guide and rounding guide cover that first step.

Overtime hours are simply the hours worked beyond a set threshold for a defined period — not just "a long day" or "extra effort," but a specific number that triggers a different rate of pay once it's crossed. Everything up to the threshold is regular time, paid at the normal hourly rate; everything past it is overtime, paid at a premium.

That threshold and the exact rules around it vary by location and sometimes by industry, so the rest of this guide describes the common pattern rather than one fixed law. Always check the specifics that apply to your own workplace before treating any number here as your final answer.

The most widely used overtime threshold is 40 hours in a single work week. A work week, for this purpose, is a fixed, recurring block of seven consecutive days — it doesn't have to run Sunday through Saturday, and different employers can define it differently, but once set it has to stay consistent.

Under that pattern, the first 40 hours in the work week are regular hours, and every hour after the 40th is overtime, no matter how the days are split up. Someone who works four 10-hour days has no overtime; someone who works five 9-hour days has one hour of it, because the total for the week is what matters, not any single day.

Once hours cross the threshold, they're paid at a multiple of the regular rate rather than the regular rate itself. The standard multiplier is time-and-a-half, written 1.5× — an hour that would normally pay $20 pays $30 as overtime. A smaller number of situations use double-time, written 2×, which doubles the regular rate; this is reserved for narrower cases, such as hours beyond a second, higher threshold, or certain holiday and emergency work, and isn't the default the way time-and-a-half is.

The "regular rate" the multiplier applies to isn't always just the number on an offer letter. If someone earns a shift differential, a non-discretionary bonus, or commission tied to hours worked, that can factor into the regular rate used for overtime — a detail that trips people up more often than the multiplier itself does.

With the threshold and the rate in hand, the calculation itself is short:

Enter hours worked in a week and an hourly rate. The calculator uses the common 40-hour weekly threshold — pick 1.5× or 2× to match your situation.

Notice the overtime hourly rate itself is $27 — the $18 base rate times 1.5 — and that figure only applies to the 7 hours past the threshold, not the whole week. It's a common mistake to apply the higher rate to all 47 hours; the premium is only for the hours that earned it.

The 40-hours-a-week model looks only at the weekly total, so a long single day doesn't trigger overtime on its own as long as the week stays under the threshold. Some places layer a separate daily rule on top of the weekly one — for instance, treating hours beyond a set number worked in a single day as overtime, in addition to the weekly count.

Because this varies so much by location, the safest approach is to find out which model applies to your workplace rather than assume — the same weekly hour total can produce two different pay outcomes depending on which rule is in force.

The formula above assumes one hourly rate for the whole week. That breaks down the moment someone earns two different rates in the same work week — a second role at a different pay level, a shift differential on certain days, or a temporary rate change partway through. In that case, overtime isn't calculated on either rate alone; it's calculated on a blended regular rate: total straight-time earnings for the week, divided by total hours worked.

The last step looks different from the single-rate example because the overtime hours' straight-time pay is already counted once inside the $810 total — only the extra half needs to be added on top. It's a small but important distinction from simply multiplying overtime hours by 1.5× a single rate.

Being paid a salary doesn't automatically mean overtime doesn't apply. Some salaried roles are exempt from overtime based on the type of work and the pay level, and some are non-exempt and still entitled to it despite being paid a fixed weekly amount. For a non-exempt salaried employee, the regular hourly rate for overtime purposes is worked out by dividing the salary by the number of hours it's intended to cover, and the same formula from earlier applies from there.

• Applying the overtime rate to every hour instead of just the hours past the threshold.
• Leaving differentials or bonuses out of the regular rate the multiplier is based on.
• Assuming a purely weekly rule when a daily threshold also applies, or the reverse.
• Averaging two rates instead of using total earnings ÷ total hours when a blended rate is needed.
• Assuming any salaried role is automatically exempt from overtime without checking.

Overtime is one of the last steps in the payroll chain, not the first. Punches usually get rounded, then totalled into hours worked, sometimes converted into decimal figures for payroll software, and finally checked against the overtime threshold — each covered in its own guide: timesheet rounding, calculating hours worked, converting minutes to decimal hours, and filling out a weekly timesheet.