Overtime Calculator

What Does Overtime Pay Mean?

Overtime pay refers to the extra money you earn for working beyond your usual hours. For example, if you work 40 hours a week and are eligible for overtime, working 50 hours means you’ll get 10 hours of overtime pay. Whether you qualify for overtime depends on your weekly earnings and hours worked. According to federal law, covered employees must receive overtime at a rate of at least one and a half times their regular pay for any hours worked over 40 in a week unless they’re exempt. However, working on weekends, holidays, or days off without exceeding 40 hours does not automatically qualify you for overtime.

How Does Overtime Pay Work?

Overtime kicks in when an employee works more than a set number of hours in a week. These extra hours are paid at a higher rate than normal. For hourly workers, this means being paid extra for any hours worked beyond a certain threshold each week. Federally, overtime is paid at 1.5 times your normal hourly rate for work done over 40 hours a week. For instance, if you earn $10 per hour and work 45 hours, you’ll receive your usual $10 rate for the first 40 hours, and $15 for each additional hour. Salaried workers earning above a certain amount are typically exempt from overtime rules. As of 2020, employees earning under $684 per week must receive overtime pay, although employers can count bonuses and incentives towards up to 10% of this salary threshold.

How Is Overtime Pay Calculated?

To calculate your overtime pay, you multiply your regular hourly rate by the overtime rate. Then, multiply that figure by the number of overtime hours worked. For example, if you usually earn $10 an hour and receive time-and-a-half for overtime, your overtime rate would be $15 ($10 x 1.5). If you worked 8 hours of overtime, you would earn $120 (8 hours x $15).

Who Qualifies for Overtime Pay?

Whether or not you qualify for overtime pay depends on your job role. Employees are classified as either "exempt" or "non-exempt." According to the Fair Labor Standards Act (FLSA), only non-exempt employees are entitled to overtime pay. Employers must ensure that non-exempt workers are paid at least the federal minimum wage and are compensated at one and a half times their regular rate for any hours worked beyond 40 per week. Remember, state laws may set minimum wages higher than the federal level. A workweek can start on any day and is a fixed 168-hour period. However, certain states have rules limiting daily working hours. For example, if an employee works over 8 hours in a day, even if they don’t exceed 40 hours in a week, they may still be entitled to overtime.

Overtime Rules and Regulations

The FLSA mandates that non-exempt employees who work more than 40 hours a week must be paid 1.5 times their regular wage. However, each state may have its own overtime rules. In California, for example, non-exempt employees can earn 1.5 times their pay or double time if they work more than a specific number of hours in one day. To avoid legal issues, employers must follow both federal and state laws. Double time—paid at twice the regular rate—may apply in certain cases, like working on public holidays. Although the FLSA does not require double-time pay, some employers offer it voluntarily.

Types of Overtime Pay

• Double-time pay: This means earning twice your usual pay rate. For instance, if you earn $20 an hour, double-time pay would give you $40 for each extra hour worked. This is often offered for work done on holidays or beyond regular hours. Double time is not required by the FLSA but may be offered by employers.

• Time off instead of pay: Some employers offer extra time off instead of paying for overtime. The terms of this arrangement are usually agreed upon between you and your employer.

• Voluntary overtime: Your employer may offer overtime that you can choose to accept or decline without facing consequences.

• Non-guaranteed overtime: This refers to overtime hours you may be required to work based on your employment contract, but only if offered by your employer.

• Mandatory overtime: This is overtime that your employment contract requires you to work. Your employer must ensure compliance with various laws when enforcing mandatory overtime.

By understanding these rules and adhering to them, you can avoid penalties and ensure that employees are paid fairly. It's essential to check both federal and state laws to determine if an employee qualifies for overtime, remembering that exempt employees may not be entitled to overtime based on their role and salary.