How to Calculate Overtime Pay: Formula, Steps, and Worked Examples (2027)
Updated for 2027: figures on this page use the 2027 federal tax figures (IRS Revenue Procedure 2026-35, announced 5 November 2026).
The overtime formula is short. The mistakes are not. Most wrong checks come from the wrong rate, the wrong week, or hours averaged across two weeks. Run the steps below with your own numbers to see what each extra hour should pay.
Multiply your regular hourly rate by 1.5 to get your overtime rate, then multiply that rate by the hours you worked over 40 in the workweek. Add the result to your regular pay for the first 40 hours. For example, at $20 an hour for 45 hours: 40 × $20 plus 5 × $30 equals $950 gross pay.
âš¡ Key Takeaways
- Overtime rate = regular rate × 1.5. Total gross pay = regular pay for 40 hours + overtime pay.
- Count hours per workweek — a fixed 7-day period. Never average two weeks together.
- Your regular rate can be higher than your base wage when a bonus, shift pay, or commission counts in.
- The overtime premium is the extra half: 0.5 × regular rate × overtime hours.
- Gross pay is not take-home pay. FICA and income-tax withholding still come out.
What Is the Overtime Pay Formula?
The federal formula has three parts, and each one needs the right number before you multiply anything:
Overtime pay = overtime hours × (regular rate × 1.5)
Total gross pay = (40 × regular rate) + overtime pay
The regular rate is the hourly rate the multiplier applies to. For a plain hourly job it is your hourly wage; when extra pay counts in, it is higher — see the bonus and two-rate sections below. The overtime hours are the hours actually worked over 40 in one workweek. The multiplier is 1.5 under federal law: the U.S. Department of Labor requires at least one and one-half times the regular rate for hours over 40 in a workweek for covered, non-exempt employees. An employer or contract can pay more; double time, at 2 times the rate, is not a federal requirement. Unsure whether the rule covers your job? Start with our explanation of how overtime pay works, then come back to run the numbers.
See the premium separately. Every overtime hour is paid once at straight time, plus an extra half:
Overtime premium = 0.5 × regular rate × overtime hours
At $20 an hour for 45 hours, straight time for all 45 hours is 45 × $20 = $900, plus a premium of 5 × $10 = $50, for $950 — the same as $800 regular pay + $150 overtime pay. Keep this split in mind: it explains why some pay stubs show overtime as a small premium line instead of the full 1.5 times rate.
How Do You Calculate Overtime Pay Step by Step?
Work in this order, one workweek at a time:
- Count the hours actually worked in the workweek. Use your time records, day by day. Do not count unpaid time off the clock, such as an unpaid meal break when you were fully relieved of duty, and do not borrow hours from another week.
- Find your regular rate. With no extra pay in the week, it is your hourly wage. If a bonus, shift differential, or commission applies, work out the adjusted rate first, as shown below.
- Count the overtime hours. Subtract 40 from the total hours worked. If the total is 40 or less, there are no federal overtime hours. If it is 45, there are 5.
- Find the overtime rate. Multiply the regular rate by 1.5. At $20, that is $30. At $25, it is $37.50.
- Add regular pay and overtime pay. Regular pay is 40 × regular rate; overtime pay is overtime hours × overtime rate. Their sum is the gross pay for the week, before any tax or deduction.
Worked example 1 — $20 an hour, 45 hours. Regular pay: 40 × $20.00 = $800.00. Overtime rate: $20.00 × 1.5 = $30.00. Overtime pay: 5 × $30.00 = $150.00. Total gross pay: $800.00 + $150.00 = $950.00. The premium check: 5 × $10.00 = $50.00 on top of $900.00 straight time, which also gives $950.00.
Worked example 2 — $28 an hour, 52 hours. Regular pay: 40 × $28.00 = $1,120.00. Overtime rate: $28.00 × 1.5 = $42.00. Overtime pay: 12 × $42.00 = $504.00. Total gross pay: $1,120.00 + $504.00 = $1,624.00. Premium check: 52 × $28.00 = $1,456.00, plus 12 × $14.00 = $168.00, also $1,624.00.
Overtime rate and 5-hour overtime pay at common wage levels:
| Regular rate | Overtime rate (1.5×) | Pay for 5 overtime hours |
|---|---|---|
| $15.00 | $22.50 | $112.50 |
| $18.00 | $27.00 | $135.00 |
| $20.00 | $30.00 | $150.00 |
| $25.00 | $37.50 | $187.50 |
| $30.00 | $45.00 | $225.00 |
| $35.00 | $52.50 | $262.50 |
If the same pattern repeats every week, 5 overtime hours at $30 an hour is $150.00 a week, $7,800.00 a year, or $650.00 a month on average (52 ÷ 12 weeks). Treat the yearly figure as an estimate only: holidays, vacation, and short weeks change it. To run your own rate and hours, use our free Overtime Pay Calculator.
How Do You Calculate Overtime Pay for a Salaried Worker?
A salary does not remove overtime by itself. A non-exempt salaried worker still earns overtime on hours over 40. First, turn the salary into an hourly regular rate:
Regular rate = annual salary ÷ 2,080 (52 weeks × 40 hours)
Weekly salary ÷ 40 gives the same result. This fits a salary set for a 40-hour week; if a salary covers a different regular schedule, divide by those hours instead. The remaining steps match the hourly method above.
Worked example — $62,400 salary, 48 hours in the week. Regular rate: $62,400 ÷ 2,080 = $30.00. Weekly salary: $62,400 ÷ 52 = $1,200.00, which is the same as 40 × $30.00. Overtime rate: $30.00 × 1.5 = $45.00. Overtime pay: 8 × $45.00 = $360.00. Total gross pay: $1,200.00 + $360.00 = $1,560.00. Premium check: 48 × $30.00 = $1,440.00, plus 8 × $15.00 = $120.00, also $1,560.00.
Two errors are common. The first is assuming every salaried job is exempt and skipping the calculation: exemption depends on duties and pay rules, not on the word salary alone. The second is dividing by the hours actually worked that week. Dividing $62,400 by 48 hours gives $25.00 and understates the overtime rate. Check the hourly figure in our Salary to Hourly Calculator before you multiply.
How Does a Bonus or Shift Pay Change the Regular Rate?
Sometimes the regular rate is not the wage on your offer letter. Under federal rules, the regular rate is total straight-time pay for the workweek divided by total hours worked:
Regular rate = total straight-time pay for the week ÷ total hours worked
Pay promised in advance or tied to a target counts in: non-discretionary bonuses, shift differentials, and commissions earned in the week. A purely discretionary gift that was never promised, such as a surprise holiday gift, stays out. When the regular rate rises, the premium rises with it.
Worked example — bonus. A worker earns $18.00 an hour, works 48 hours, and earns a $200.00 non-discretionary production bonus for that week. Straight-time pay: 48 × $18.00 = $864.00, plus the $200.00 bonus = $1,064.00. Regular rate: $1,064.00 ÷ 48 = $22.1667, or $22.17 rounded. Premium: 0.5 × $22.1667 × 8 = $88.67. Total gross pay: $1,064.00 + $88.67 = $1,152.67. Check it the full-rate way, keeping the unrounded rate until the last step: 40 × $22.1667 = $886.67, plus 8 × $33.25 = $266.00, also $1,152.67. Without the bonus, the week would have paid $936.00 (40 × $18.00 + 8 × $27.00) — $216.67 less, of which $200.00 is the bonus itself and $16.67 is the extra premium.
Worked example — shift differential. A worker earns $20.00 an hour for 48 hours, including 20 night hours at an extra $2.00. Straight-time pay: $960.00 + $40.00 = $1,000.00. Regular rate: $1,000.00 ÷ 48 = $20.8333. Premium: 0.5 × $20.8333 × 8 = $83.33. Total: $1,000.00 + $83.33 = $1,083.33 (check: 40 × $20.8333 + 8 × $31.25 = $833.33 + $250.00).
Keep the unrounded rate through every step and round only the final pay; rounding early can shift the result by a few cents. A bonus covering a month or a quarter must be spread across the weeks it covers before this calculation is run for each week: it raises the regular rate for the weeks it rewards.
How Do You Calculate Overtime at Two Different Pay Rates?
When you do two jobs at two rates in the same workweek, federal rules use a weighted average regular rate for the week. Add the straight-time pay at each rate, then divide by total hours worked:
Weighted regular rate = (rate 1 × hours 1 + rate 2 × hours 2) ÷ total hours
Worked example — 30 hours at $20.00 and 18 hours at $28.00, 48 hours total. Straight-time pay: 30 × $20.00 = $600.00, plus 18 × $28.00 = $504.00, for $1,104.00. Weighted regular rate: $1,104.00 ÷ 48 = $23.00. Overtime hours: 48 − 40 = 8. Premium: 0.5 × $23.00 × 8 = $92.00. Total gross pay: $1,104.00 + $92.00 = $1,196.00.
Do not apply 1.5 times the higher rate to all overtime hours, and do not use the lower rate for the whole week. The weighted average blends the rates in proportion to the hours at each one, and the premium applies only to the overtime hours. Which days those hours fall on does not change the weekly result, because the rate is already a whole-week average.
How Do You Calculate Overtime Pay on a Biweekly Schedule?
Biweekly pay changes how often you are paid. It does not change how overtime is counted. Overtime is still figured workweek by workweek, in fixed 7-day periods. A biweekly paycheck is simply the sum of two weekly calculations.
Worked example — $22.00 an hour, 50 hours in week one and 30 hours in week two. Week one: regular pay 40 × $22.00 = $880.00; overtime rate $22.00 × 1.5 = $33.00; overtime pay 10 × $33.00 = $330.00; week one total $1,210.00. Week two: 30 × $22.00 = $660.00, with no overtime hours. Biweekly gross pay: $1,210.00 + $660.00 = $1,870.00.
The averaging trap is the mistake to avoid. Averaging gives 80 ÷ 2 = 40 hours a week, which looks like no overtime. Straight time for 80 hours is $1,760.00 — $110.00 short, exactly the premium owed (0.5 × $22.00 × 10). A heavy second week is likewise not canceled out by a light first week: each week stands on its own, even on one check. Biweekly pay (26 checks a year) is not semimonthly pay (24 checks a year); our guide to semimonthly vs biweekly pay explains how the same annual pay divides across the two schedules.
How Do You Check Overtime on Your Pay Stub?
Run the calculation backward from the stub. If any step fails, that is the line to ask payroll about.
- Check the hours first. Do the hours match your time records, week by week? A biweekly stub should still let you separate the two workweeks. Wrong hours make every later figure wrong too.
- Check the overtime rate. Multiply the regular rate shown by 1.5. At $20.00, the overtime rate line should read $30.00. If the stub shows a lower rate with no bonus or rate change to explain it, flag it.
- Check the overtime pay. Multiply the overtime hours by the overtime rate and compare it with the overtime line. Five hours at $30.00 must read $150.00.
- Check the gross pay. Regular pay plus overtime pay, plus any other earnings lines, must equal the gross pay for the period. For the $20.00, 45-hour week: $800.00 + $150.00 = $950.00.
- Read a premium line correctly. Some stubs show straight time for all hours plus a separate premium line at 0.5 times the rate. That is not an error on its own: the premium for 5 hours at $20.00 should read $50.00, and regular pay should include straight time for all 45 hours ($900.00), totaling $950.00. See the abbreviations on a pay stub and how to read your pay stub for every code and box.
Gross pay is not what lands in your bank account. FICA comes out at 7.65% combined: 6.2% Social Security on wages up to the 2027 wage base of $192,300, plus 1.45% Medicare on all wages. On the $950.00 week, Social Security is $58.90 and Medicare is $13.78, for $72.68 combined, leaving $877.32 before federal and state withholding. Federal withholding depends on annual income, filing status, and W-4, so one big overtime week can look heavily withheld and still reconcile at filing time. See how to calculate take-home pay for the full path from gross to net, and check the bottom line in the Paycheck Calculator.
One last caution: some states add daily overtime rules on top of the federal weekly rule. This guide uses the federal weekly rule throughout. If your state has a daily rule, it can change which hours count, so check the state labor department rules where the work was done.
Frequently Asked Questions
How do I calculate my overtime rate per hour?
Multiply your regular hourly rate by 1.5. At $20 an hour, the overtime rate is $30 an hour. At $25 an hour, it is $37.50 an hour. That rate applies only to the hours over 40 in the workweek. The first 40 hours stay at your regular rate.
How do I calculate overtime pay for biweekly pay?
Calculate each workweek on its own. Find the overtime hours and overtime pay for week one, then do the same for week two, and add the two weekly totals. Never average the two weeks together. A 50-hour week and a 30-hour week still owe overtime for the 10 hours over 40 in the first week.
How do I calculate overtime pay when I earn a bonus?
Add the nondiscretionary bonus to your straight-time pay for the period, divide by the total hours worked to get your regular rate, and take half that rate times your overtime hours as the premium. Discretionary gifts that were never promised stay out of the calculation.
Is overtime pay taxed at a higher rate?
No. Overtime pay is ordinary wages, taxed at the same rates as your other pay. Withholding on a large overtime check can look higher because payroll annualizes that one check, but the tax you actually owe is settled when you file your return.
Why does my pay stub show overtime at only half my hourly rate?
Some stubs list overtime as straight time plus a separate premium line. The straight-time pay for every hour, including overtime hours, is already in your regular pay. The premium line then adds only the extra half, which is 0.5 times your regular rate for each overtime hour. Added together, the two lines equal time and a half.
Try It Yourself
Ready to check your own numbers? Use our free Overtime Pay Calculator — enter your rate and hours to see your overtime pay and premium instantly. To see what is left after tax, try the Paycheck Calculator.