How Overtime Pay Is Calculated (and How to Estimate Yours)

Overtime rules confuse a lot of people because eligibility depends on your classification, not just your job title. Here's the basic framework in the U.S. under the Fair Labor Standards Act (FLSA).

Exempt vs. Non-Exempt

Non-exempt employees are legally entitled to overtime pay. Exempt employees — typically salaried workers above a federal salary threshold in executive, administrative, or professional roles — generally are not, regardless of hours worked. Job title alone doesn't determine this; the actual duties and salary level do.

The Standard Overtime Formula

For non-exempt employees, hours worked beyond 40 in a single work week are generally paid at 1.5x your regular hourly rate (some states, like California, have daily overtime rules too — check your state's labor department for specifics).

• Regular pay: hourly rate × 40 hours
• Overtime pay: hourly rate × 1.5 × overtime hours
• Total: regular pay + overtime pay

Example

At $25/hour working 46 hours in a week: 40 hours × $25 = $1,000 regular pay, plus 6 hours × $37.50 (1.5x) = $225 overtime, for a total of $1,225 that week — versus $1,150 if all 46 hours were paid at the flat rate.

Enter your hourly rate into our real-time calculator and watch how quickly overtime hours compound your earnings compared to straight time — it's a useful gut check when deciding whether to pick up an extra shift.