Finance guide
How to Calculate Overtime Pay (Time and a Half, Double Time)
The overtime formula with worked examples, weekly vs daily rules in the US, UK, UAE and India, salaried overtime, decimal hours and the slips that make payslips wrong.
By M2Toolkit Editorial TeamPublished 6 min read
Quick answer
Overtime pay = overtime hours × hourly rate × overtime multiplier. At time and a half (1.5×), someone on $20 an hour who works 46 hours in a week earns 40 × $20 = $800 for regular hours plus 6 × $30 = $180 for overtime: $980 gross.
The maths is simple once you know three things: which hours count as overtime, what multiplier applies to them, and what your “regular rate” really is. This guide walks through each one with worked examples, then covers the slips that most often make a payslip look wrong.
The overtime formula
Overtime pay = overtime hours × hourly rate × multiplier
Gross pay = regular pay + overtime pay
The multiplier is usually 1.5 (time and a half) and sometimes 2 (double time). Only the hours above the threshold get the multiplier. The first 40 hours of a 46-hour week are still paid at the normal rate.
- 1Add up the hours worked in the pay period, after taking off unpaid breaks.
- 2Split them into regular hours (up to the threshold, often 40 a week) and overtime hours (the rest).
- 3Multiply regular hours by your hourly rate.
- 4Multiply overtime hours by your hourly rate and the multiplier.
- 5Add the two together for gross pay, before tax and deductions.
Worked examples
| Situation | Working | Gross pay |
|---|---|---|
| $18/h, 45 hours, 1.5× over 40 | 40 × $18 + 5 × $27 | $855 |
| $25/h, 50 hours, 1.5× over 40 | 40 × $25 + 10 × $37.50 | $1,375 |
| $22/h, 42 hours, plus 4 hours of holiday work at 2× | 40 × $22 + 2 × $33 + 4 × $44 | $1,122 |
| £12/h, 44 hours, employer pays 1.25× over 37.5 | 37.5 × £12 + 6.5 × £15 | £547.50 |
A handy check: your effective hourly rate for the week is gross pay ÷ total hours. In the first row, $855 ÷ 45 is $19 an hour. It's more than $18 because of the overtime, but well below the $27 overtime rate.
Weekly vs daily overtime, and rules in different countries
Where overtime starts depends on the law where you work and on your contract. Some places count it per week, some per day, and some leave it entirely to the employment contract. The table summarises common rules. Always check the current law and your contract, because exemptions and collective agreements change the picture.
| Where | Common rule |
|---|---|
| United States (federal FLSA) | 1.5× for hours over 40 in a workweek for non-exempt employees. No federal daily limit. |
| California | 1.5× over 8 hours in a day or 40 in a week; 2× over 12 hours in a day; special rules for the seventh consecutive day. |
| United Kingdom | No legal overtime rate. Pay depends on the contract, but average pay must not fall below the minimum wage. |
| United Arab Emirates | At least 25% extra on the basic wage, and at least 50% extra for overtime between 10 pm and 4 am. |
| India (Factories Act) | Twice the ordinary rate for hours beyond the daily or weekly limits. |
Overtime when you're paid a salary
Many salaried workers are exempt from overtime, but not all of them. If you're a salaried, non-exempt employee whose salary covers a 40-hour week, your hourly rate is the weekly salary divided by 40.
In the US, the “regular rate” used for overtime must also include most non-discretionary bonuses and shift premiums, such as a production bonus or night-shift differential. That can push the overtime rate above 1.5× your base hourly rate.
Converting minutes to decimal hours
Payroll works in decimal hours, so 7 hours 45 minutes is 7.75 hours, not 7.45. Divide the minutes by 60:
| Minutes | Decimal | Minutes | Decimal |
|---|---|---|---|
| 10 | 0.17 | 40 | 0.67 |
| 15 | 0.25 | 45 | 0.75 |
| 20 | 0.33 | 50 | 0.83 |
| 30 | 0.50 | 55 | 0.92 |
Mistakes that make payslips look wrong
- Applying the multiplier to every hour. Only hours above the threshold are paid at 1.5×.
- Forgetting unpaid breaks. A 9-hour shift with a 30-minute unpaid lunch is 8.5 paid hours.
- Writing minutes as decimals. 7:45 is 7.75 hours. Typing 7.45 loses 18 minutes of pay.
- Mixing up pay periods. Weekly overtime is counted per workweek, even if you're paid every two weeks. 50 hours plus 30 hours is 10 overtime hours, not zero.
- Comparing gross with net. Overtime is taxed like other pay, so take-home pay rises by less than the gross figure.
Frequently asked questions
What is time and a half for $20 an hour?
$30 an hour: $20 × 1.5. Double time would be $40 an hour.
Is overtime taxed more?
It's taxed as ordinary income at your usual rates. Larger paychecks can be withheld at a higher rate, but the final tax depends on your total yearly income.
Do paid holidays count towards the 40 hours?
Under US federal rules, hours paid but not worked, such as holidays and sick days, usually don't count towards overtime unless your employer's policy or contract says they do.
How do I calculate overtime for a two-week pay period?
Split it into the two workweeks and work out overtime for each week separately, then add the results.