How to Calculate Overtime Pay: Time-and-a-Half Explained

What time-and-a-half really means

Time-and-a-half means each overtime hour is paid at 1.5 times your regular rate. It does not increase your base pay — only the hours above the threshold are boosted. At $20 an hour, an overtime hour pays $30. The extra $10 per hour is the premium that rewards the longer week.

The threshold is the pivot. In the US, federal law sets it at 40 hours in a single workweek, and every hour beyond earns at least 1.5×. Elsewhere the threshold and premium are set by law or collective agreement, so always check the rule that applies to your contract before you calculate.

A worked weekly example

Say your rate is $20 an hour and the threshold is 40 hours. In a 46-hour week, the first 40 hours pay 40 × $20 = $800. The 6 overtime hours pay 6 × ($20 × 1.5) = 6 × $30 = $180. Your gross for the week is $800 + $180 = $980, of which $180 is the overtime.

The order matters: never apply the overtime factor to all your hours, only to the ones past the threshold. A common payroll error is multiplying the whole week by 1.5, which inflates pay. Overtime is always a premium on the extra hours alone.

Double-time and higher premiums

Some jobs pay double-time (2×) for work on public holidays, Sundays or hours far beyond the normal week. At $20 an hour, a double-time hour pays $40. Whether double-time applies is set by your contract or local law, not by the federal overtime floor, so read your agreement carefully.

Salaried workers can be entitled to overtime too, depending on their duties and pay level. Do not assume a fixed salary rules it out — check whether your role is classified as exempt or non-exempt, because that decides whether the extra hours must be paid.

Frequently asked questions

Is overtime calculated per day or per week?

Federal US rules count overtime by the workweek — hours past 40 in that week. Some states and many contracts elsewhere also use daily limits. Check the rule that governs your job before you total your hours.

Does overtime pay get taxed more?

The pay itself is not taxed at a special rate, but a bigger paycheck can push part of your income into a higher bracket or raise withholding. Your average rate rises slightly, not the overtime specifically.

How do I find my hourly rate from a salary?

Divide your regular weekly pay by your normal weekly hours. A $800 weekly salary for 40 hours is $800 ÷ 40 = $20 an hour, the base for any overtime multiplier.

Can my employer give time off instead of overtime pay?

It depends on the law and your contract. Compensatory time off in place of overtime pay is common in public-sector or agreement-based systems, but is restricted in some private-sector rules. Check what your contract and local law allow.