The Complete Guide to Calculating Overtime Pay
By Arshi Khan, Founder of Just4Marketing · Last reviewed October 2026
Overtime pay is extra pay for hours worked beyond a normal schedule, usually at a higher rate such as time and a half. Knowing how it's worked out lets you check your paycheck, plan extra shifts, or estimate the cost of overtime as an employer. This guide explains the formula, common overtime rates, and what the weekly figures add up to over a year.
The overtime formula
Overtime rate = regular hourly rate × overtime multiplier. Weekly pay = (regular rate × regular hours) + (overtime rate × overtime hours) + (regular rate × 2 × double-time hours).
A worked example
An employee earns $22 an hour and works 48 hours in a week: 40 regular and 8 overtime at time and a half.
| Item | Calculation | Pay |
|---|---|---|
| Regular pay | $22 × 40 | $880.00 |
| Overtime rate | $22 × 1.5 | $33.00/hr |
| Overtime pay | $33 × 8 | $264.00 |
| Total for the week | $880 + $264 | $1,144.00 |
| Average per hour worked | $1,144 ÷ 48 | $23.83 |
If every week looked like this, yearly pay before tax would be $59,488 — $13,728 of it from overtime.
Things to keep in mind
Exempt vs non-exempt
Many salaried roles are exempt from overtime rules. Check your job classification before counting on overtime pay.
The regular rate can include more than base pay
In the US, some bonuses and shift differentials must be included when working out the overtime rate.
Use realistic weeks
Set 'weeks like this per year' to how often you actually work overtime for an honest yearly figure.
Frequently asked questions
How do I calculate time and a half?
Multiply your regular hourly rate by 1.5 to get the overtime rate, then multiply by the overtime hours. At $22 an hour, time and a half is $33 an hour, so 8 overtime hours pay $264.
When does overtime start?
In the US, the federal Fair Labor Standards Act requires time and a half for non-exempt employees after 40 hours in a workweek. Some states add daily overtime or double time, and other countries have their own rules — so set the regular hours and multiplier to match your situation.
What is double time?
Double time pays twice the regular rate. It's required in some places — for example, after 12 hours in a day in California — and some employers offer it for holidays or weekends. Enter double-time hours separately in the calculator.
Is overtime taxed more?
Overtime is taxed as ordinary income at the same rates as your other pay. A larger paycheck can have more withheld, which can make it look as if overtime is taxed more, but the yearly tax works out the same as any other income. This calculator shows pay before tax.