Working extra hours should mean extra pay, and under United States labor law it usually does. The rule is simple on the surface, time and a half for hours past 40, but the details trip up employees and small employers alike. This guide covers who qualifies for overtime, the exact formula, how salaried workers convert their pay, and a complete worked example with real numbers.
FLSA Basics: Who Gets Overtime
The Fair Labor Standards Act requires employers to pay nonexempt employees at least one and one half times their regular rate for every hour worked beyond 40 in a single workweek. The workweek is a fixed seven-day period, and hours cannot be averaged across two weeks to dodge the threshold.
Not everyone is covered. Exempt employees, generally salaried workers in executive, administrative, or professional roles who meet specific salary and duty tests, are not entitled to overtime. Independent contractors are also outside the FLSA. When in doubt, the Department of Labor applies exemption tests narrowly, meaning most hourly workers are nonexempt and do qualify.
One more detail that matters: the 40-hour threshold is based on hours actually worked. Paid time off, sick days, and holidays usually do not count toward the 40 unless your employer or state says otherwise. So a week with 32 worked hours plus an 8-hour paid holiday is 32 hours for overtime purposes, not 40, even though you were paid for 40.
The Overtime Formula
The core calculation has two parts. First find the overtime rate, then multiply by the extra hours:
Overtime rate = regular hourly rate multiplied by 1.5
Overtime pay = overtime rate multiplied by overtime hours
Total weekly pay = (40 multiplied by regular rate) plus overtime pay
Note that the regular rate is not always the base hourly wage. Nondiscretionary bonuses, shift differentials, and commissions earned in the week can raise the regular rate, which raises the overtime rate too. The 1.5 multiplier always applies to the true regular rate, not just the posted hourly figure.
What About Salaried Workers
Nonexempt salaried employees still earn overtime; their salary simply needs converting to an hourly equivalent first. The standard conversion is:
Regular hourly rate = annual salary divided by 52 divided by 40
For example, a 52,000 dollar salary converts to 1,000 dollars per week, divided by 40 hours, giving 25 dollars per hour. The overtime rate is then 37.50 dollars per hour. Some employers and states use alternative methods, such as dividing by actual hours worked, so check local rules, but the 52/40 conversion is the common starting point.
Worked Example
Alex earns 20 dollars per hour and works 48 hours in one week. The regular pay covers the first 40 hours: 40 multiplied by 20 equals 800 dollars. The overtime rate is 20 multiplied by 1.5, which equals 30 dollars per hour. Overtime pay covers the extra 8 hours: 8 multiplied by 30 equals 240 dollars. Total weekly pay is 800 plus 240, which equals 1,040 dollars.
Now suppose Alex also earned a 100 dollar weekly production bonus. Under federal rules, the bonus raises the regular rate, so the math changes. Straight-time earnings are 48 multiplied by 20 plus the 100 dollar bonus, totaling 1,060 dollars. The regular rate is 1,060 divided by 48, which equals 22.08 dollars per hour. Because the straight-time pay already covers all 48 hours, Alex is owed only the extra half-time premium on the 8 overtime hours: 11.04 multiplied by 8 equals 88.33 dollars. Total pay is 1,060 plus 88.33, or 1,148.33 dollars. Bonuses genuinely move the needle, which is why the true regular rate matters more than the posted hourly figure.
Frequently Asked Questions
Is overtime calculated daily or weekly?
Under federal law, the trigger is weekly: more than 40 hours in one workweek. Some states, like California and Alaska, also require daily overtime after 8 hours, so check your state law.
Do I get overtime on holidays?
Federal law does not require premium pay for working on holidays. Many employers offer it voluntarily, but it is a company policy matter, not a legal one, unless your state says otherwise.
What if I work two jobs for the same employer?
Hours are combined. If you work 25 hours at one company location and 20 at another for the same employer, that is 45 total hours, and 5 are overtime.
Can my employer refuse to pay unauthorized overtime?
The employer must still pay for all hours you actually worked, even if the overtime was not pre-approved. They can discipline you for breaking policy, but they cannot withhold the wages.
Does overtime apply to part-time workers?
Yes, if they are nonexempt and exceed 40 hours in a week. Part-time status does not remove FLSA protection; only the hours threshold matters.
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