Under federal law, overtime is calculated as at least 1.5 times your regular rate of pay for every hour you work over 40 in a single workweek. If you earn $24 an hour and work 50 hours, you get $24 for the first 40 hours and $36 for the last 10.
That's the short answer to how is overtime calculated, but the details matter: what counts as your "regular rate," which workers qualify, how states can add their own rules, and why a big overtime week sometimes seems to get taxed more heavily. This guide covers each piece with a worked example.
The federal overtime rule
The Fair Labor Standards Act (FLSA) requires employers to pay non-exempt employees at least time and a half for hours over 40 in a workweek. A few points trip people up:
- It's per workweek, not per pay period. If you work 30 hours one week and 50 the next, you're owed 10 hours of overtime for the second week, even though your two-week total is exactly 80 hours.
- The workweek is fixed. Your employer sets a recurring seven-day, 168-hour period. It doesn't have to match the calendar week.
- Federal law doesn't require daily overtime. Working a 12-hour day doesn't trigger federal overtime on its own. Some states do require it; California is the best-known example.
- Weekends and holidays aren't automatically overtime. Premium pay for those days is an employer policy or contract term, not a federal requirement.
Who qualifies for overtime
Overtime applies to non-exempt employees. Most hourly workers are non-exempt. Some salaried employees are exempt, meaning they don't receive overtime, but only if they meet the Department of Labor's tests for salary level and job duties.
Being paid a salary doesn't by itself make you exempt. A salaried worker who doesn't meet the exemption tests is still owed overtime. The Department of Labor's overtime pages explain the categories, and our comparison of salary vs hourly pay covers the practical trade-offs.
Independent contractors aren't covered by the FLSA's overtime rules, since they aren't employees.
What counts as your regular rate
Time and a half is based on your "regular rate," which isn't always just your base hourly wage. Under the FLSA, the regular rate generally includes non-discretionary pay such as shift differentials and production or attendance bonuses you're promised in advance. Certain payments, like discretionary gifts and expense reimbursements, are excluded.
When extra pay is included, the employer divides total straight-time compensation by total hours worked to find the regular rate, then pays an additional half of that rate for each overtime hour. This is why the overtime line on a pay stub sometimes doesn't equal exactly 1.5 times your base wage.
Basic formula
- Regular pay = regular rate × hours up to 40
- Overtime rate = regular rate × 1.5
- Overtime pay = overtime rate × hours over 40
- Gross pay = regular pay + overtime pay
Worked example: a 50-hour week in Georgia
Say you earn $24 an hour, file single, live in Georgia and get paid weekly. In a normal week you work 40 hours. One busy week you work 50.
- Regular pay: 40 × $24 = $960
- Overtime rate: $24 × 1.5 = $36
- Overtime pay: 10 × $36 = $360
- Gross pay: $1,320
Here's how the two weeks compare after estimated taxes, using the Georgia paycheck calculator. Georgia taxes wages at a flat 5.19% in 2026 after a $12,000 standard deduction for single filers.
| Item | 40-hour week | 50-hour week | Difference |
|---|---|---|---|
| Gross pay | $960.00 | $1,320.00 | $360.00 |
| Federal income tax | $73.28 | $120.59 | $47.31 |
| Social Security | $59.52 | $81.84 | $22.32 |
| Medicare | $13.92 | $19.14 | $5.22 |
| Georgia income tax | $37.85 | $56.53 | $18.68 |
| Take-home pay | $775.43 | $1,041.90 | $266.47 |
The $360 of overtime adds about $266 to your check, so you keep roughly 74 cents of each overtime dollar in this example. The rest goes to the same taxes as your regular pay, just at your top rates.
Why overtime weeks can look over-taxed
Overtime isn't taxed at a special rate. It's ordinary wages. But the IRS percentage method annualizes each paycheck: payroll treats a $1,320 week as if you earned that every week of the year. That pushes more of the check into the 12% and 22% brackets than your actual annual income might justify.
In the example above, 52 weeks at $1,320 would be $68,640 a year, which reaches the 22% federal bracket. If you only work overtime occasionally, your real annual income is lower and some of that extra withholding comes back as part of your refund. The calculator's per-paycheck figures assume the same pay every period, so treat a single overtime week as a rough estimate.
For a deeper look at how payroll handles bigger-than-usual checks, see why a paycheck can be smaller than expected.
The new federal deduction for overtime
Federal legislation passed in 2025 created a deduction for qualified overtime pay. It's claimed on your federal tax return, not through payroll, and it generally doesn't change how much is withheld from a standard paycheck. Social Security, Medicare and state taxes still apply to overtime as usual.
Eligibility rules and limits apply, so check the IRS page on the new provisions or read our guide to the tips and overtime deductions for how it fits with your paycheck.
Checking your overtime on a pay stub
- Confirm the hours: overtime hours should match the hours you worked over 40 in each workweek, not per pay period.
- Check the rate: it should be at least 1.5 times your regular rate, including any non-discretionary bonuses or differentials.
- Look at both weeks separately if you're paid biweekly.
- If something doesn't add up, ask payroll first. If that doesn't resolve it, the Department of Labor's Wage and Hour Division or your state labor agency handles wage complaints.
To estimate your own take-home pay with overtime, enter your total weekly hours in the paycheck calculator, counting each overtime hour as 1.5 hours.
Frequently Asked Questions
Is overtime taxed at a higher rate?
No. Overtime is regular wages and is taxed under the same brackets. Withholding may look higher because payroll annualizes a larger-than-usual paycheck.
Do I get overtime for working more than 8 hours in a day?
Not under federal law, which counts hours over 40 in a workweek. A few states, including California, require daily overtime, so check your state's labor department.
Can my employer give me comp time instead of overtime pay?
Private-sector employers generally must pay overtime in cash for non-exempt employees. Comp time rules are different for some public-sector employees; the Department of Labor explains the details.
Do salaried employees get overtime?
Salaried employees who don't meet the FLSA exemption tests are still owed overtime. Exempt status depends on salary level and job duties, not just being paid a salary.
Sources
- U.S. Department of Labor: Overtime Pay
- U.S. Department of Labor: Fair Labor Standards Act
- IRS: One Big Beautiful Bill Provisions
- IRS Publication 15-T, Federal Income Tax Withholding Methods
Run the numbers for your state
Written and checked against IRS, Social Security Administration and state tax agency publications for the 2026 tax year. General information, not tax, legal or financial advice. Read our editorial policy, calculation methodology and sources.