How Overtime Pay Is Calculated (Time-and-a-Half)

David Vance, CPA

Senior Payroll & Tax Specialist · Published 2026-10-05 · 5 min read

Under the federal Fair Labor Standards Act (FLSA), non-exempt employees must receive overtime pay for any hours worked beyond 40 in a single workweek at a rate not less than 1.5 times their regular hourly rate ('time-and-a-half'). For instance, if your regular rate is $24.00 per hour, your overtime rate is $36.00 per hour ($24.00 x 1.5). Certain states like California and Alaska also require daily overtime after 8 hours worked in a single calendar day.

Standard Weekly Overtime Formula

Gross Overtime Pay = (Regular Hourly Rate x 1.5) x Overtime Hours Worked. If an employee earning $20/hr works 48 hours in a workweek, total gross pay is: (40 x $20) + (8 x $30) = $800 + $240 = $1,040.

Daily Overtime Rules in California, Alaska, and Nevada

While federal law only counts hours above 40 in a week, California mandates: 1. Time-and-a-half for hours worked beyond 8 in a single workday. 2. Double-time (2.0x regular pay) for hours worked beyond 12 in a single workday or beyond 8 hours on the 7th consecutive day of work.

Does Overtime Pay Get Taxed at a Higher Rate?

Overtime is taxed as ordinary income. However, because overtime increases that specific pay period's gross total, automated payroll withholding algorithms may withhold taxes at a higher bracket, just as with bonuses. You get any over-withheld tax back at year-end.

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Calculate Overtime Hours and Pay

Common Questions

Yes, if they are classified as non-exempt or earn below the federal salary threshold for overtime exemptions.

In the private sector, federal law prohibits substituting compensatory time off for overtime cash payments.