Overtime pay looks simple until a bonus, a salary, or a daily-hours rule changes the maths. This guide shows you how to calculate overtime pay step by step, with time and a half and double time formulas, a bonus worked example, and the rules in the US, California and the UK.
Your job as the searcher is simple: you want the correct gross pay for a week that ran long, and a reliable way to check it against a pay stub. You get both below, plus a bonus example and a three-country comparison.
What is time and a half?
Time and a half is an overtime rate of 1.5 times your regular hourly rate, paid for each overtime hour. If you earn $20 an hour, your overtime rate is $30 an hour. In the US, federal law requires this rate for covered, non-exempt workers after 40 hours in a workweek.
The U.S. Department of Labor sets the federal rule under the Fair Labor Standards Act (FLSA): unless exempt, covered employees must receive overtime pay for hours over 40 in a workweek at not less than time and one-half their regular rate. A workweek is a fixed period of 168 hours, seven consecutive 24-hour periods.
Double time is the same idea with a bigger multiplier: 2 times your regular rate. Federal law does not require it. It appears in some state rules, union agreements and employer policies, usually for very long days. The maths is identical, just with 2 in place of 1.5.
One point causes most confusion. The FLSA does not require extra pay just because you worked a weekend or a holiday. What counts is the weekly total. Weekend hours only earn the premium when they push you past 40 hours in that workweek, unless your state law or contract says otherwise.
How do you calculate overtime pay, step by step?
To calculate overtime pay, split your week into regular hours and overtime hours, multiply the overtime hours by your regular rate times 1.5, and add the two amounts together. Regular pay is hours up to 40 times your rate. Overtime pay is hours past the threshold times the premium rate.
Here is the method in five steps:
- Find your regular rate. Start with your hourly rate. A non-discretionary bonus, shift differential or commission for the week usually belongs in the rate, as the example below shows.
- Split the hours. Count total hours in the single workweek. The first 40 are regular hours. Anything above 40 is overtime, under the federal rule.
- Work out the overtime rate. Regular rate x 1.5. At $20 an hour, that is $30 an hour.
- Price each block. Regular pay is 40 x your regular rate. Overtime pay is overtime hours x the overtime rate.
- Add the blocks. Regular pay plus overtime pay is your gross pay for the week, before tax and other deductions.
A quick example, before the harder one. You earn $20 an hour and work 46 hours in one workweek. Regular pay: 40 x $20 = $800. Overtime rate: $20 x 1.5 = $30. Overtime pay: 6 x $30 = $180. Gross pay: $800 + $180 = $980.
Check that answer a second way, the method payroll rules actually use. Price every hour at straight time first: 46 x $20 = $920. Then add just the extra half for each overtime hour: 6 x $10 = $60. Total: $920 + $60 = $980. Both routes agree. If you need your base rate first, run your salary through LancerBill’s hourly rate calculator.
Tip: Keep your own hours record each week, even if your employer uses a time clock. You can only check a pay stub if you have your own total to compare.
Worked example: when a bonus raises your regular rate
Most overtime guides stop at the simple example above. That is where real pay stubs go wrong, because the regular rate is not always your headline hourly rate. The Department of Labor treats most bonus payments as part of the regular rate. A bonus earned by hitting a target or producing more is normally non-discretionary, so it counts. A truly discretionary gift, with no prior promise, normally does not.
Take this week. Assumptions: US, federal rules, one workweek, hourly worker, no state daily overtime.
| Input | Figure |
|---|---|
| Hourly rate | $18 an hour |
| Hours worked | 44 hours (40 regular, 4 overtime) |
| Non-discretionary production bonus | $88 for the week |
Step 1, price all hours at straight time and add the bonus: 44 x $18 = $792, plus $88 = $880.
Step 2, work out the true regular rate: $880 divided by 44 hours = $20 an hour. The bonus lifted your rate from $18 to $20.
Step 3, add the overtime premium. You have already been paid straight time for all 44 hours, so you are owed the extra half rate on the 4 overtime hours: 4 x ($20 x 0.5) = 4 x $10 = $40.
Step 4, total gross pay: $880 + $40 = $920.
Now compare the shortcut many people use. They price 40 hours at $18 ($720), 4 overtime hours at $27 ($108), then add the bonus ($88). That gives $916. It looks tidy, and it leaves you $4 short for the week. Repeat that gap across a year of overtime weeks and you lose real money without ever seeing an obvious error.
The same weighted average applies if you work two hourly rates in one week: add the earnings at both rates, divide by total hours, and use that average as your regular rate. Convert between hourly, daily and weekly figures with the rate converter when you check a mixed week.
Watch out: Averaging hours across two weeks is not allowed under the FLSA. A 50-hour week followed by a 30-hour week is not a neat 40 plus 40. The long week still contains 10 overtime hours.
How is overtime calculated for salaried staff?
For a non-exempt salaried worker, divide the weekly salary by the hours that salary is meant to cover, usually 40, to get an hourly rate. Multiply that rate by 1.5 for each overtime hour and add it to the salary. Exempt staff, by contrast, get no overtime at all.
Example. Assumptions: US, non-exempt, weekly salary of $1,000 that covers a 40-hour week, and 45 hours worked. Hourly rate: $1,000 divided by 40 = $25. Overtime rate: $25 x 1.5 = $37.50. Overtime pay: 5 x $37.50 = $187.50. Gross pay for the week: $1,000 + $187.50 = $1,187.50.
The word that decides everything here is exempt. Executive, administrative, professional and certain other staff who meet the Department of Labor salary and duties tests are exempt, so extra hours bring no extra pay under federal law. Job titles alone do not decide this. A person called a manager can still be non-exempt if the pay and duties do not meet the tests. Our guide to converting salary to hourly pay walks through the same division in more depth.
When does overtime start in the US, California and the UK?
Overtime starts at different points depending on where you work. US federal law uses a weekly trigger: over 40 hours in one workweek. California adds a daily trigger after 8 hours in a day. The UK has no statutory overtime trigger at all, so your contract sets the threshold.
Keep this comparison as your reference:
| Rule | US federal (FLSA) | California | UK |
|---|---|---|---|
| Main trigger | Over 40 hours in a workweek | Over 8 hours in a day or over 40 in a week | No statutory trigger; contract decides |
| Standard premium | At least 1.5 x regular rate | 1.5 x for hours 8 to 12 in a day | No statutory premium; 1.5 x is common but voluntary |
| Double time | Not required by federal law | 2 x after 12 hours in a day, and after 8 hours on the seventh consecutive day | Not required; contract decides |
| Weekend or holiday work | No premium unless it creates overtime hours | Seventh-day rules can apply | No premium unless the contract promises one |
| Official source | U.S. Department of Labor | California Department of Industrial Relations | GOV.UK |
California shows why state law matters. The California Department of Industrial Relations states that a non-exempt employee gets one and one-half times the regular rate for hours over 8 in a workday and over 40 in a workweek, and double time over 12 in a workday. So a single 13-hour day in California pays 8 hours at straight time, 4 at time and a half, and 1 at double time, even if the weekly total stays under 40. Where both laws apply, the worker gets the higher standard.
The UK sits at the other end. GOV.UK states that employers do not have to pay workers for overtime, but average pay for total hours worked must not fall below the National Minimum Wage, and your contract will usually include any overtime rates. A UK worker on time and a half gets it because the contract says so, not because a statute sets 1.5. The same formula still prices it: contracted rate x 1.5 x extra hours.
How should freelancers charge for extra hours?
Self-employed freelancers are not covered by employee overtime law, so no client owes you time and a half automatically. You build the premium into your contract instead: state an hourly or day rate, define standard hours, and price extra hours, rush work and weekend work at an agreed multiplier.
This is where the overtime formula becomes a pricing tool. Say your standard rate is $60 an hour inside agreed hours. A clause pricing extra hours at 1.5 x gives you $90 an hour for evening overruns, and a 2 x rush rate gives you $120 for a same-day turnaround. The client agrees before the urgent week happens, which is the whole point.
Use this framework when you write the clause:
| Situation | Suggested pricing |
|---|---|
| Extra hours, planned in advance, inside the working week | Standard rate, or 1.25 x if your week is already full |
| Evening or early-morning overrun at short notice | 1.5 x your standard rate |
| Weekend work or a same-day rush deadline | 1.5 x to 2 x, agreed in writing before you start |
| Work that displaces another paying client | 2 x, or decline it; the premium has to cover the displaced work |
Build the base rate properly first. If your standard rate is too low, a 1.5 multiplier just gives you a slightly less low number. LancerBill’s freelance rate calculator helps you set a rate covering tax, quiet weeks and non-billable time, and the monthly rate calculator converts it for retainer clients. See also our comparison of freelance hourly rates versus a salary.
Common overtime mistakes that cost you money
Using the base rate when a bonus was paid. Skipping the bonus understates your regular rate and every overtime hour priced from it. Check any week with a bonus, commission or shift differential twice.
Counting overtime by the day under federal law. A 10-hour Monday followed by short days may produce no federal overtime if the week totals 40 or less. Five steady days plus a long Saturday can create overtime you miss if you only look at daily totals. Federal law counts the week. California counts both.
Letting two weeks blur together. Hours cannot be averaged over a pay period to cancel a long week. Each workweek stands alone, even when you are paid fortnightly.
Assuming a salary means no overtime. Salary is a payment method, not an exemption. Non-exempt salaried staff are owed overtime. Only staff meeting the tests on both pay level and duties fall outside the rule.
Forgetting the effective rate check. Divide gross pay by total hours worked. For the $980 week earlier, that is $980 divided by 46, about $21.30 an hour. The result should sit between your regular rate and your overtime rate. If it sits at or below your regular rate in an overtime week, something is wrong.
Rule of thumb: if a week contains overtime hours, your effective hourly rate for that week must be higher than your regular rate. If it is not, the premium is missing somewhere.
Key takeaways
- Time and a half means 1.5 x your regular rate. US federal law requires it for covered, non-exempt workers after 40 hours in one workweek.
- Split the week: regular hours x your rate, plus overtime hours x the premium rate. Check it the second way too: straight time for all hours, plus the extra half.
- Bonuses, commissions and shift differentials usually raise your regular rate. Skipping them is the most common reason a pay stub is short.
- California adds daily overtime after 8 hours and double time after 12. The UK has no statutory overtime rate, so the contract decides.
- Freelancers get no automatic overtime premium. Price extra, rush and weekend hours at 1.5 x to 2 x in your contract, before the work starts.
Frequently asked questions
How do you calculate time and a half for an hourly worker?
Multiply your regular rate by 1.5 to get the overtime rate, then multiply by the overtime hours. At $20 an hour, the overtime rate is $30. Five overtime hours pay $150, on top of $800 for the first 40 hours: $950 gross for a 45-hour week.
Is double time pay required by law?
Not under US federal law. The Department of Labor states that the FLSA has no requirement for double time; it is a matter of agreement between employer and employee. Some state rules do require it. California requires double time after 12 hours in a workday.
Can my employer average my hours over two weeks?
No. The Department of Labor states that averaging hours over two or more weeks is not permitted under the FLSA. Each workweek is judged on its own, so a 50-hour week contains 10 overtime hours even if the next week is 30 hours.
Do salaried employees get overtime pay?
Non-exempt salaried employees do. Divide the weekly salary by the hours it covers, usually 40, to find an hourly rate, then pay 1.5 times that rate for overtime hours. Staff who meet the exemption tests on salary level and duties get no overtime.
Do freelancers and independent contractors get overtime pay?
No. Overtime law covers employees, not self-employed contractors. A client owes you a premium only if your contract includes one. Write an extra-hours rate, a rush rate and a weekend rate into your agreement before you start.
Is overtime pay taxed at a higher rate?
Overtime pay is taxed as ordinary income, at the same rates as regular pay. A large overtime week can look heavily taxed because withholding is calculated as if that higher amount continued all year, and extra income can push part of your earnings into a higher band. Your final bill is worked out on total annual income.
Rates last reviewed: October 2026.
This guide is for general information only and is not financial, tax or legal advice.