Time and a half: how much an overtime hour pays

The arithmetic, step by step

Start with the regular rate, multiply it by 1.5 to get the overtime rate, and multiply that by the overtime hours. For an hourly worker with no extras, the regular rate is the hourly wage. A cook paid $22.00 who works 46 hours in a week has 6 overtime hours. The first 40 hours pay $880, the 6 overtime hours pay $33.00 each, or $198, and the week totals $1,078. The extra half alone, the premium the law adds on top of straight time, is worth $66 that week.

Over a year the premium adds up. Someone earning $20.00 who works 5 overtime hours a week for 50 weeks earns $7,500 in overtime pay, $2,500 more than the same hours at straight time. That is why the classification of a job, exempt or not, is worth checking before accepting a salary.

What counts in the regular rate

Federal regulations define the regular rate as an hourly figure drawn from what the employee is actually paid: total pay for the workweek, minus a short list of exclusions, divided by the hours actually worked. That list of inclusions is wider than most people expect. Shift differentials for nights or weekends count. Commissions count. Bonuses count when they are promised in advance or tied to production, attendance, safety or quality, because they are not left to the employer's discretion. Only a few items stay out: reimbursed expenses, the premium part of overtime already paid, true premiums for weekend or holiday work, gifts, discretionary bonuses decided at the employer's sole discretion near the end of the period, and pay for time not worked such as vacation, holidays or sick days.

Here is how a bonus changes the result. A warehouse worker earns $18.00 an hour, works 45 hours and receives a $90 production bonus for the week. The regular rate is $900 divided by 45 hours, or $20.00. Straight time for all hours plus the bonus is already paid, so the employer owes an extra half of $20.00 for the 5 overtime hours, $50.00. A payroll that ignores the bonus pays only $945.00 for the week instead of $950.00. The gap looks small for one week, and it is exactly the kind of error that adds up in back-pay claims.

Salaried and non-exempt

A salary does not cancel the right to overtime. Many salaried employees are non-exempt because their duties or their pay fail the exemption tests, and they are owed time and a half like anyone else. When a salary is paid for a fixed schedule, the regular rate is the weekly salary divided by the hours it is meant to cover. A coordinator paid $900 a week for a 40-hour schedule has a regular rate of $22.50; working 48 hours in one week earns 8 overtime hours at $33.75, or $270 on top of the salary. The exempt vs non-exempt guide explains which salaried jobs fall on each side.

Tipped workers, double time and other twists

For a tipped employee, the overtime rate is computed on the full minimum wage, not on the reduced cash wage. Under federal law that gives $10.88, from which the employer may subtract the same $5.12 tip credit as for regular hours, leaving at least $5.76 in cash per overtime hour. The tipped minimum wage guide has the state figures.

Double time is twice the regular rate. Federal law never requires it. California does, for hours beyond 12 in a day in California, and some union contracts and employer policies add it on holidays. Hours paid at double time are not paid again at time and a half: each hour gets one premium, the higher one.

Overtime pay belongs on the regular payday for the pay period in which the workweek ends. Federal rules allow a delay only when the amount cannot be worked out in time, and then no later than the next payday after it can be computed. In Alaska, New Mexico and North Dakota, state law also says outright that a private employer cannot swap overtime pay for compensatory time off later. Shifting hours inside the same workweek is lawful, so a manager can send someone home early on Friday after a long Monday to keep the week at 40 hours.

Paid days off and the 40-hour line

The threshold counts hours actually worked. A paid holiday, a vacation day or a sick day puts money in the check but adds nothing to the hours that trigger overtime, because pay for time not worked is excluded from the regular rate calculation. Take a week with a paid Monday holiday and four 10-hour days: the check covers 48 paid hours, yet only 40 were worked, so no time and a half is due under federal law. Montana writes the same point into its own rules, stating that holiday, sick and vacation hours do not count toward the 40. Some employers count paid leave toward overtime anyway, by policy or under a union contract, and that is lawful because it pays more than the minimum. The reverse is not: an employer cannot label worked hours as something else to keep the total under the line.

Reading your pay stub

A correct stub shows straight hours and overtime hours on separate lines, each with its rate. Check three things. The overtime rate should be at least 1.5 times your hourly wage, and higher in any week with a promised bonus or a shift differential. The overtime hours should match the hours over 40 in each workweek, not in the pay period, since a two-week check can hide a 50-hour week next to a 30-hour week. And in a state with daily overtime, long days should show up even when the week is short. Keep your own record of start and end times; it is the best evidence if the numbers do not match.

Where state law changes the count

The 1.5 multiplier is the same everywhere; what varies is how many hours earn it. In Alaska, California, Colorado and Nevada, hours over a daily limit earn time and a half even when the week stays under 40. Minnesota's own threshold is 48 hours, though the federal 40 still binds most employers there. The overtime laws by state page applies each state rule to a full week. If an employer pays straight time for hours that should earn the premium, the state labor agency or the Wage and Hour Division takes the claim and decides it on the payroll and time records.