How Overtime Pay Works (and When You're Entitled to It)

Overtime pay sounds simple, time and a half past 40 hours, but who qualifies and how it is calculated trips up both workers and employers. Knowing the rules helps you make sure you are paid what you are owed.

The basic rule

Under federal law, non-exempt employees must be paid at least 1.5 times their regular rate for hours worked beyond 40 in a workweek. That is the "time and a half" everyone knows. Some states add their own rules, such as daily overtime past 8 hours in a day.

Exempt vs. non-exempt

The big question is whether you are "exempt." Exempt employees (often salaried workers in executive, administrative, or professional roles who earn above a salary threshold) are not entitled to overtime. Non-exempt employees are. Being paid a salary does not automatically make you exempt, the job duties and salary level both have to qualify.

How the overtime rate is figured

Overtime is based on your "regular rate," which can include more than your base hourly wage, certain bonuses and commissions may have to be folded in. For most hourly workers it is straightforward (hourly wage x 1.5), but the regular-rate rules matter when extra pay is involved.

The workweek matters

Overtime is calculated per workweek, a fixed, recurring 7-day period, not per pay period. Averaging hours across two weeks to avoid overtime (working 50 one week and 30 the next) is generally not allowed; the 50-hour week still earns overtime.

If you think you're owed overtime

Misclassification (treating a non-exempt worker as exempt) is a common and costly error. If your duties do not match an exemption and you regularly work over 40 hours without extra pay, it is worth reviewing. Keep your own record of hours worked as backup.

Calculate your overtime earnings with our overtime pay calculator.