How Overtime Pay Is Calculated

Overtime pay rewards hours worked beyond a set threshold at a higher rate than regular hours. This guide explains the pieces — regular hours, overtime hours, the threshold and the multiplier — and shows how time-and-a-half pay is calculated with a worked example.

Regular hours and overtime hours

In an overtime calculation, your weekly hours are split into two groups. Regular hours are the hours up to the overtime threshold, paid at your normal hourly rate. Overtime hours are the hours above the threshold, paid at a higher rate.

For example, with a 40-hour threshold and 46 hours worked, you have 40 regular hours and 6 overtime hours. The split always uses the threshold as the boundary.

Regular hours = min(total hours, threshold)
Overtime hours = max(total hours − threshold, 0)

The overtime threshold

The threshold is the number of hours in a period — usually a week — after which overtime begins. A 40-hour weekly threshold is common, but thresholds vary by employer, contract and jurisdiction. Some workplaces also apply daily overtime rules, where hours beyond a daily limit are paid at a higher rate regardless of the weekly total.

Use the threshold that matches the rules that apply to you. The calculators on this site default to 40 hours and let you change it.

The overtime multiplier

The multiplier is how many times your regular rate is paid for overtime hours. Time-and-a-half is a 1.5× multiplier, so each overtime hour is paid at 1.5 times your normal rate. Double time is a 2× multiplier. Some workplaces use different multipliers for different situations, such as a higher rate on public holidays.

Like the threshold, the multiplier depends on your employer, contract and local rules. Check which one applies to you before relying on a figure.

The time-and-a-half calculation

Time-and-a-half means 1.5 times your regular hourly rate. To find the overtime rate, multiply your regular wage by 1.5. To find overtime pay, multiply that rate by your overtime hours. Total gross pay is regular pay plus overtime pay.

Overtime rate = regular hourly rate × multiplier
Regular pay = regular hours × regular rate
Overtime pay = overtime hours × overtime rate
Total gross pay = regular pay + overtime pay

Overtime rules vary

Overtime rules — who qualifies, what the threshold is, which multiplier applies, and whether daily overtime also applies — vary by employer, employment contract and jurisdiction. Not every worker is legally entitled to overtime, and the rules can differ for salaried versus hourly staff, for different industries, and from one country or state to another.

This guide is informational only. It explains the arithmetic behind overtime pay; it is not legal, tax or payroll advice. Where a figure matters for your pay, confirm the applicable rules and the resulting amount with your employer or payroll provider.

Common questions

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