What this calculator does
Enter your regular hourly rate and the hours you work. The calculator shows your overtime rate, your overtime pay, your total pay for the week, your average pay per hour worked and your overtime pay over a year. It also shows the overtime premium, the part above your regular rate, that may count for the federal deduction for qualified overtime in tax years 2025 to 2028.
How overtime pay is worked out
Overtime rate = regular rate × 1.5 (time and a half), or × 2 for double time. Weekly pay = regular rate × regular hours + overtime rate × overtime hours + double rate × double-time hours. Example: at $22 an hour, 40 regular hours and 8 overtime hours pay $880 + 8 × $33 = $1,144 for the week. Over 26 such weeks, overtime adds $6,864, of which $2,288 is the half-time premium.
Federal and state overtime rules
- Under the Fair Labor Standards Act, covered non-exempt employees must get at least one and a half times their regular rate for hours over 40 in a workweek (U.S. Department of Labor).
- Each workweek is counted on its own; employers cannot average hours over two or more weeks (DOL Fact Sheet 23).
- Some employees are exempt, depending on their job duties and pay. A salary alone does not make someone exempt.
- Some states require more, such as daily overtime or double time. When both apply, you get the higher amount.
The overtime deduction (2025 to 2028)
For tax years 2025 through 2028, you may deduct qualified overtime compensation, the pay that exceeds your regular rate, up to $12,500 a year, or $25,000 on a joint return. The deduction shrinks once modified adjusted gross income is over $150,000 ($300,000 joint) (IRS). Only the overtime federal law requires counts, so for time and a half it is the extra half; premiums paid only under a state law or a contract do not count. Social Security and Medicare taxes still apply. Use the new tax deductions calculator for your estimate.
Frequently asked questions
How do I calculate time and a half?
Multiply your regular hourly rate by 1.5. At $20 an hour, time and a half is $30 an hour.
Is overtime paid after 8 hours a day?
Federal law counts hours over 40 in a workweek. Some states, such as California, also require overtime after 8 hours in a day.
Is overtime taxed more?
No. Overtime is taxed like other wages, though a bigger paycheck can mean more tax withheld that week. The new deduction can lower the income tax on the premium part when you file.
Can my employer give me time off instead of overtime pay?
Private employers generally must pay overtime in money. Some public employers may give compensatory time off under special rules.