Overtime Calculator

Overtime pay under federal law, governed by the Fair Labor Standards Act (FLSA), requires that non-exempt employees receive compensation at a rate of at least time and a half (1.5 times) their regular rate for hours worked over 40 in a workweek. The FLSA defines a workweek as a fixed period of 168 hours, or seven consecutive 24-hour days, which does not need to align with the calendar week. This rule applies irrespective of whether the hours are worked on weekends or holidays unless the total exceeds 40 hours during the week.

Employees are classified as exempt or non-exempt based on salary and job duties. As of January 2025, the salary threshold for exemption is set at $58,656 annually. Non-exempt employees must track their hours meticulously to ensure they receive appropriate overtime compensation. Violations of these provisions can result in significant penalties for employers, including fines up to $1,000 per violation and repayment of owed wages.

Calculating overtime pay involves several steps to ensure accurate compensation. First, determine your regular rate of pay, which includes your hourly wage plus any non-discretionary bonuses or shift differentials. For employees working multiple rates, the regular rate is a weighted average of all rates for that week. Next, identify all hours worked beyond 40 in a workweek as overtime.

The formula for calculating overtime pay is straightforward: Regular Rate of Pay x 1.5 x Overtime Hours Worked. For example, if you earn $20 per hour and work 45 hours in a week, your overtime pay would be $20 x 1.5 x 5 = $150. It's important to note that state laws may have additional requirements, such as daily overtime pay for hours worked over eight in a day.

While the FLSA provides a baseline for overtime compensation, many states have implemented their own regulations that can offer greater protection to employees. For instance, California requires not only time and a half for hours worked over 40 in a week, but also for hours worked beyond eight in a single day. Additionally, California mandates "double time" pay, or two times the regular rate, for hours worked over 12 in one day or over eight on the seventh consecutive day of work.

Employers must comply with both federal and state laws, adhering to the rule most favorable to the employee. This means understanding specific state mandates is crucial for both employers and employees to ensure compliance and adequate compensation for overtime work.

Many salaried employees assume they are not eligible for overtime pay, but this is not always true. Non-exempt salaried employees who earn below the federal salary threshold may still qualify for overtime. The calculation for these employees involves dividing their weekly salary by the total hours worked to establish the regular hourly rate, then applying an additional half rate for overtime hours.

Tracking hours remains essential for non-exempt salaried workers to ensure they receive proper overtime compensation. It's a common misconception that salaried positions automatically exclude overtime eligibility, making it vital for employees to understand their classification under the FLSA and state laws.