How overtime pay works
For most hourly workers in the US, federal law requires overtime pay of at least one and a half times the regular rate for every hour worked over 40 in a workweek. The workweek is a fixed, repeating period of 7 days set by the employer.
Pay = rate × regular hours + rate × 1.5 × overtime hours
Worked example
You earn $20 an hour and work 48 hours this week.
- Regular pay: 40 × $20 = $800
- Overtime pay: 8 × $30 = $240
- Total: $1,040 before taxes
Without the overtime rate, 48 hours would pay $960, so overtime adds $80 that week.
Things that can change your overtime
- State law: some states require daily overtime or double time. Set the threshold and double-time hours to match your situation.
- Regular rate: certain bonuses and shift differentials may need to be included in the regular rate used for overtime.
- Exempt status: many salaried managers and professionals are not owed overtime.
Comparing an hourly job with a salary? Use the salary to hourly calculator.
Last reviewed October 2026.
Frequently asked questions
How is overtime pay calculated?
Under the federal Fair Labor Standards Act, non-exempt employees must be paid at least 1.5 times their regular rate for hours worked over 40 in a workweek. If you earn $20 an hour, each overtime hour pays at least $30.
Who is eligible for overtime?
Most hourly workers are non-exempt and eligible. Some salaried employees in executive, administrative or professional roles who meet salary and duties tests are exempt. Your employer or the US Department of Labor can tell you how you are classified.
Do some states have daily overtime?
Yes. A few states have stricter rules than federal law. For example, California generally requires overtime after 8 hours in a day and double time in some situations. Check your state labor department for its rules.
What is double time?
Double time pays 2 times your regular rate. It is not required by federal law, but some states, union contracts and employers require it for certain hours, such as very long days or holidays.
Is overtime taxed more?
No. Overtime is withheld like regular wages, although a bigger paycheck can make withholding look higher that week. For tax years 2025 through 2028, federal law also lets many eligible workers deduct part of their overtime premium (the extra "half" of time and a half) on their tax return, up to a yearly limit. Check current IRS guidance for the details.