← Back to Blog

How to Calculate Overtime Pay: Simple Formula & Examples

2026-09-30

Overtime pay is calculated by multiplying your regular hourly rate by the overtime multiplier and the number of overtime hours worked. For example, if you earn $20 per hour and work 10 overtime hours at 1.5× pay, your overtime earnings are $300.

Overtime Pay = Hourly Rate × Overtime Multiplier × Overtime Hours

You can also use our free Overtime Pay Calculator to calculate overtime earnings instantly.

This guide walks through what overtime pay actually is, the formula behind it, a step-by-step calculation process, several worked examples, and the most common mistakes people make when figuring out what they're owed.

Need a quick answer?

Skip the manual math. Use our Overtime Pay Calculator to instantly calculate:

Just enter your hourly rate, hours worked, and overtime multiplier, and your full breakdown appears immediately.

What is overtime pay?

Overtime pay is extra compensation paid to employees for hours worked beyond their standard schedule, most commonly beyond 40 hours in a single week. Instead of being paid at your normal hourly rate for these additional hours, you're paid at a higher rate, determined by an overtime multiplier.

Why do employers pay overtime? In many places, overtime pay is required by labor law for eligible employees, designed to compensate for the extra time and reduced personal availability that comes with working beyond a standard schedule. It also creates a financial incentive for employers to manage staffing levels carefully rather than routinely relying on extended hours from the same employees.

Regular hours vs overtime hours. Regular hours are the hours within your standard schedule, typically up to 40 hours a week for a full-time employee. Overtime hours are anything worked beyond that threshold. The distinction matters because each type of hour is paid at a different rate, so keeping them separate is the first step in any overtime calculation.

Common overtime situations include working extra shifts to cover for a colleague, extended hours during a busy season, mandatory overtime required by an employer, and voluntary overtime an employee picks up to earn extra income.

Here's a quick example of what the numbers look like before any calculation:

Regular Rate:   $20/hour
Hours Worked:   50
Regular Hours:  40
Overtime Hours: 10

The rest of this guide builds directly on an example like this one.

Overtime pay at a glance

Here's how a few common combinations of hourly rate, overtime hours, and multiplier play out:

Hourly Rate OT Hours Multiplier Overtime Pay
$15 5 1.5× $112.50
$20 10 1.5× $300
$25 8 2× $400

For your own numbers, the Overtime Pay Calculator fills in a table like this instantly, without needing to calculate each row by hand.

Overtime pay formula

The core formula for overtime pay is straightforward once you know its three parts:

Overtime Pay = Hourly Rate × Overtime Multiplier × Overtime Hours

Hourly rate is the regular amount you earn per hour, before any overtime multiplier is applied. If you're paid a salary rather than an hourly wage, this needs to be calculated first, which is covered in the step-by-step section below.

Overtime multiplier is the factor applied to your hourly rate for overtime hours. A few common examples:

Type Multiplier
Standard overtime 1.5×
Double time 2×
Holiday overtime 2× or higher

Common overtime multipliers, in more detail:

Multiplier Meaning
1.25× Light overtime, used by some employers for early overtime hours
1.5× Time and a half, the most common standard overtime rate
2× Double time, typically for extended hours or specific agreements
2.5× Holiday premium, sometimes applied for work on major holidays

Not every employer uses all of these tiers. Many workplaces apply a single standard rate, most often 1.5×, for all overtime hours, while others use a tiered system where the multiplier increases the more overtime is worked, or on specific days like public holidays. Check your employee handbook or local labor law for the exact multipliers that apply to you.

Overtime hours are the hours worked beyond your standard work schedule, most commonly beyond 40 hours in a week, though the exact threshold depends on your employer's policy and local labor law.

Step-by-step overtime calculation

Here's the full process broken into four steps, using a consistent example throughout.

Step 1: Determine your hourly rate

If you're already paid hourly, you can skip straight to Step 2. If you're salaried, convert your salary into an hourly rate first:

Hourly Rate = Weekly Salary ÷ Weekly Hours

Example:

Weekly Salary = $800
Weekly Hours  = 40

Hourly Rate = $800 ÷ 40 = $20

Step 2: Find overtime hours

Subtract your regular hours from your total hours worked to find how many hours qualify as overtime:

Worked  = 50 hours
Regular = 40 hours

Overtime = 50 − 40 = 10 hours

Step 3: Apply the overtime multiplier

Multiply your hourly rate by the overtime multiplier to find your effective overtime rate:

Hourly Rate         = $20
Overtime Multiplier = 1.5

Overtime Rate = $20 × 1.5 = $30

Step 4: Calculate total overtime pay

Multiply your overtime rate by the number of overtime hours worked:

Overtime Rate  = $30
Overtime Hours = 10

Overtime Pay = $30 × 10 = $300

Putting it all together, working 50 hours at a $20 hourly rate, with 10 of those hours at a 1.5× overtime multiplier, results in $300 of overtime pay on top of your regular earnings. Your total pay for the week would be your regular pay ($20 × 40 = $800) plus your overtime pay ($300), for a total of $1,100.

Overtime pay examples

Here are a few more worked examples at different rates and multipliers.

Example 1: Standard overtime (1.5×)

Hourly Rate = $15
OT Hours    = 5

Overtime Pay = $15 × 1.5 × 5 = $112.50

Example 2: Double time (2×)

Hourly Rate = $25
OT Hours    = 8

Overtime Pay = $25 × 2 × 8 = $400

Example 3: Salaried employee

Salaried employees who qualify for overtime follow the same underlying formula, but require an extra conversion step first:

  1. Convert salary into an hourly rate. Divide the weekly salary by the standard number of weekly hours, as shown in Step 1 above.
  2. Apply the overtime multiplier. Multiply the resulting hourly rate by the applicable multiplier, whether that's 1.5×, 2×, or another rate set by the employer or local law.
  3. Calculate total overtime earnings. Multiply the overtime rate by the number of overtime hours actually worked.

For example, a salaried employee earning $1,000 a week on a standard 40-hour schedule has an hourly rate of $25 ($1,000 ÷ 40). If that employee works 6 overtime hours at 1.5×, the overtime rate is $37.50, and total overtime pay is $225 (6 × $37.50).

Not all salaried employees are eligible for overtime pay. Eligibility typically depends on how the role is classified under local labor law, which is covered in more detail in the FAQ section below.

Common overtime rates explained

A handful of overtime rate types come up most often across different employers and situations.

Time and a half. This is 1.5× your regular hourly rate, and it's the most common overtime rate in many workplaces. It applies to hours worked beyond a standard weekly threshold, most commonly 40 hours.

Double time. This is 2× your regular hourly rate. It's less common than time and a half and typically applies in more specific circumstances, such as working significantly beyond a standard schedule or under particular union or company agreements.

Holiday overtime. Rates for work performed on public holidays vary considerably by employer and jurisdiction. Some employers apply the same 1.5× or 2× multipliers used for standard overtime, while others set a separate, sometimes higher, holiday rate. It's worth checking your employee handbook or local regulations for the exact policy that applies to you.

Use our free overtime pay calculator

Working through the formula by hand is useful for understanding how overtime pay is calculated, but it's easy to make a small error, especially when juggling different multipliers or converting a salary to an hourly rate. Our Overtime Pay Calculator handles the math for you.

Features:

Enter your hourly rate, regular hours, overtime hours, and multiplier, and the calculator instantly shows your regular pay, overtime pay, and total earnings, along with a breakdown of your effective overtime rate. Calculate overtime pay now →

Common mistakes when calculating overtime

A few errors come up repeatedly when people work out their own overtime pay by hand.

Mistake #1: Using the wrong hourly rate. This often happens with salaried employees who skip the conversion step and apply an overtime multiplier directly to a rate that doesn't reflect their actual base hourly pay. Always convert salary to an accurate hourly figure first.

Mistake #2: Forgetting the overtime multiplier. Simply multiplying hourly rate by overtime hours, without applying the multiplier at all, understates overtime earnings significantly. A $20 hourly rate for 10 overtime hours at 1.5× is $300, not $200.

Mistake #3: Counting regular hours as overtime hours. All hours worked in a period aren't automatically overtime. Only hours beyond the standard threshold, commonly 40 hours a week, qualify, so it's important to subtract regular hours correctly before applying the overtime rate.

Mistake #4: Ignoring company overtime policies. Some employers apply different thresholds, multipliers, or rules than the general standard, particularly for holiday work or specific job classifications. Checking your employee handbook or asking HR directly can prevent miscalculating what you're actually owed.

Frequently asked questions

How do I calculate overtime pay? Use the formula: Hourly Rate × Overtime Multiplier × Overtime Hours. First find your hourly rate, then determine how many hours were overtime, apply the appropriate multiplier, and multiply by the overtime hours worked.

What is time and a half? Time and a half means earning 1.5 times your normal hourly wage. A $20 hourly rate becomes $30 an hour for any hours paid at this rate.

What is double time? Double time means earning twice your regular hourly rate. A $20 hourly rate becomes $40 an hour for hours paid at this rate.

Can salaried employees receive overtime? In some situations, yes. Eligibility depends on employment classification and local labor regulations. Many salaried roles that are classified as exempt do not qualify for overtime, while non-exempt salaried employees typically do.

Is overtime calculated before or after taxes? Overtime pay is calculated before taxes and deductions. Like regular pay, it's a gross figure, and your actual take-home amount will be reduced by applicable income tax and payroll deductions.

Weekly vs daily overtime rules

Most overtime rules are based on a weekly threshold, commonly 40 hours, but it's worth understanding that this isn't universal. Depending on where you work, overtime can be calculated in a few different ways:

This distinction matters because it changes how you should track your hours. If only weekly rules apply, a long day followed by a short day might average out with no overtime owed. If daily rules also apply, that same long day could trigger overtime pay on its own, independent of the weekly total. Since these rules vary significantly by location, industry, and sometimes by union agreement, it's worth checking your specific local labor regulations or your employee handbook rather than assuming the standard 40-hour weekly rule automatically applies to your situation.

Tips for tracking your overtime accurately

Getting the formula right matters less if the underlying hours aren't tracked correctly in the first place. A few habits can help ensure your overtime pay is calculated accurately.

Keep your own record. Even if your employer uses a formal time-tracking system, keeping a personal log of your start and end times, along with any breaks, gives you an independent record to check your paycheck against.

Understand what counts as work time. Some situations, like brief on-call periods, short breaks, or travel between job sites during a shift, may or may not count toward your hours depending on your employer's policy and local law. If you're unsure, it's worth asking directly rather than assuming.

Review your pay stub each period. Check that the regular hours, overtime hours, and rates listed match your own records. Catching a discrepancy early, right after a pay period, is generally easier to resolve than trying to reconstruct hours from several months earlier.

Clarify your classification. Whether you're classified as hourly or salaried, and as exempt or non-exempt where that distinction applies, has a direct effect on whether you're eligible for overtime at all. If you're not sure how you're classified, asking HR for clarification removes any ambiguity before it becomes a problem.

Use a calculator to double-check totals. Manual calculations, especially across multiple pay periods or multiple overtime rates, are an easy place for small errors to creep in. Running your numbers through the Overtime Pay Calculator is a quick way to confirm that what you expect to be paid matches what actually shows up.

Related tools

If you're working out your own pay, these tools can help:

Conclusion

Calculating overtime pay is straightforward once you know your hourly rate, overtime hours, and overtime multiplier. By using the formula and examples above, whether you're an hourly employee or converting from a salary, you can estimate overtime earnings accurately for any pay period. For faster results, try our free Overtime Pay Calculator and get instant calculations without doing the math by hand.