How Overtime Pay Works: Time-and-a-Half Explained
Learn how to calculate overtime pay, time-and-a-half, weekly overtime earnings and the difference between regular and overtime rates.
For many hourly workers covered by federal overtime rules, overtime is commonly paid at one and one-half times the regular rate after more than 40 hours in a workweek. Eligibility and the regular-rate calculation can depend on the job and pay arrangement.
Time-and-a-half formula
A simple example uses hourly rate × 1.5 = overtime rate. If regular pay is $20 per hour, a basic time-and-a-half rate is $30 per overtime hour.
Example: 45 hours at $20 per hour
Regular pay for 40 hours is $800. Five overtime hours at $30 are $150. Total gross weekly pay is $950 before taxes and deductions.
Overtime pay and taxes
Overtime earnings are wages and are included in payroll withholding. A larger paycheck can produce more withholding in that pay period, but overtime does not create a separate special federal income-tax rate just because the hours are overtime.
Not every worker uses the same overtime rule
Exempt status, alternative pay structures, state rules, collective bargaining agreements and the legally defined regular rate can change the calculation. PaycheckRadar's overtime calculator is designed for straightforward hourly scenarios and lets you choose the overtime multiplier.
Convert overtime income into annual earnings
If overtime is consistent, annualizing regular and overtime hours can help with budgeting. Use the hourly to salary calculator for normal hourly income and the overtime tool for weekly overtime scenarios.