Under US federal law (the FLSA), non-exempt employees earn overtime at 1.5× their regular hourly rate for every hour worked beyond 40 in a workweek. So at $20/hour, overtime is $30/hour. The formula is simple: overtime pay = overtime hours × hourly rate × 1.5.
The 40-hour rule
The federal threshold is 40 hours per workweek — a fixed, recurring 168-hour (7-day) period set by your employer. Hours over 40 in that week trigger time-and-a-half. The 40 hours are counted per week, not averaged across two weeks, even if you're paid bi-weekly.
How to calculate overtime
- Regular pay = regular hours × hourly rate
- Overtime pay = overtime hours × hourly rate × 1.5
- Total = regular pay + overtime pay
Example: 40 regular hours + 10 overtime hours at $20/hour → $800 + (10 × $30) = $1,100 for the week. Run your own numbers with the overtime calculator.
Double-time and state rules
Federal law only requires 1.5×, but some states and contracts add more:
- California: daily overtime over 8 hours (1.5×), and double-time (2×) over 12 hours in a day or beyond 8 hours on the 7th consecutive workday.
- Several states have their own daily-overtime or higher rules — always check your state.
Exempt vs non-exempt
Overtime applies to non-exempt employees (most hourly workers). Exempt employees — salaried staff in bona fide executive, administrative or professional roles earning above the federal salary threshold — generally aren't owed overtime. Job duties, not just a salary, determine exemption.
Overtime and your taxes
Overtime is ordinary income, taxed like the rest of your pay — it is not taxed at a special higher rate (a common myth, similar to how bonuses are taxed). More gross pay can mean more withholding per check, but your true rate is set on your return. See your net with the paycheck calculator.
Frequently asked questions
- How is overtime calculated? Overtime hours × hourly rate × 1.5.
- How many hours is overtime? Over 40 per workweek federally; some states add daily overtime over 8 hours.
- Is overtime taxed more? No — same rates as regular income; only withholding may look higher.
General information, not legal or tax advice. Check FLSA and your state's labor rules for specifics.