Overtime Pay Calculation: How to Calculate OT Pay

How Overtime Pay Works

Under the Fair Labor Standards Act (FLSA), non-exempt employees must receive overtime pay at 1.5 times their regular rate for hours worked beyond 40 in a workweek.

Basic Overtime Calculation

Overtime Rate = Regular Hourly Rate × 1.5

Example:

• Regular rate: $20/hour
• Overtime rate: $20 × 1.5 = $30/hour
• Regular hours: 40 × $20 = $800
• Overtime hours: 8 × $30 = $240
• Total gross pay: $1,040

State Overtime Variations

California

• Over 8 hours/day = 1.5x pay
• Over 12 hours/day = 2x pay
• 7th consecutive workday: first 8 hours at 1.5x, beyond 8 hours at 2x

Alaska

• Over 8 hours/day = 1.5x pay
• Over 40 hours/week = 1.5x pay

Colorado

• Over 12 hours/day = 1.5x pay
• Over 40 hours/week = 1.5x pay

Most Other States

Follow federal rules: over 40 hours/week = 1.5x pay

Who Is Eligible for Overtime?

Non-Exempt Employees (Eligible)

• Hourly workers
• Salaried employees earning below threshold
• Most blue-collar workers

Exempt Employees (Not Eligible)

• Salaried employees earning above $58,656/year
• Executive, administrative, professional roles
• Outside sales employees
• Some computer professionals

Common Overtime Mistakes

1. Not including bonuses in regular rate calculation
2. Averaging hours across two workweeks
3. Misclassifying exempt employees
4. Not tracking all hours worked (including breaks worked through)
5. Comp time instead of overtime (not legal for private employers)