How overtime pay is calculated
Overtime is usually paid at 1.5 times your regular hourly rate (“time and a half”). Overtime pay = hourly rate × 1.5 × overtime hours. If you earn $25 an hour and work 48 hours in a week, you get 40 × $25 = $1,000 regular pay plus 8 × $37.50 = $300 overtime, for $1,300 that week.
When do you get overtime?
- United States (FLSA): non-exempt employees must get at least 1.5× pay for hours over 40 in a workweek.
- California: 1.5× after 8 hours in a day or 40 in a week, and 2× (double time) after 12 hours in a day.
- Other countries: rules differ — for example, Pakistan’s Factories Act sets overtime at twice the ordinary rate for factory workers. Check your contract and local labour law and set the overtime rate in the calculator.
“No tax on overtime” in the US (2025–2028)
Under the One Big Beautiful Bill Act, US workers can deduct the premium part of qualified overtime — the extra “half” in time and a half — from federal income tax for tax years 2025 to 2028. The deduction is capped at $12,500 a year ($25,000 for married couples filing jointly) and is reduced by $100 for every $1,000 of income above $150,000 ($300,000 joint). Social Security, Medicare and state taxes still apply. Choose “United States” in step 2 and the calculator estimates your deductible premium and federal tax saving.
Is overtime worth it?
The calculator shows your extra pay per year and your effective hourly rate including overtime. Compare it with the time you give up — and remember overtime is taxed with your other income, so in a higher bracket you keep less of each overtime dollar (except the deductible premium in the US).
Not legal or tax advice. Overtime law and the deduction have eligibility rules; check with your employer or a tax professional.
How overtime pay is calculated
Weekly pay = (regular hours × rate) + (overtime hours × rate × 1.5) + (double-time hours × rate × 2)
Example with the defaults: 40 regular hours at $25 = $1,000, plus 8 overtime hours at $37.50 = $300 — $1,300 for the week. Over 20 weeks like this a year, overtime adds $6,000.
Settings explained
- Overtime rate: 1.5× (“time and a half”) is the most common; some employers or contracts pay 1.25× or 2×.
- Double-time hours: for holidays, Sundays or very long shifts where your contract pays 2×.
- Weeks like this per year: to see what regular overtime adds to your yearly income.
- Take-home estimate: overtime is taxed like other pay, so the net gain is smaller than the gross.
Is the extra time worth it?
Compare the extra take-home with the hours you give up. Eight hours of overtime that add $300 gross may add noticeably less after tax. The calculator shows both so you can decide.
Good to know
Overtime rules differ by country, state and contract — for example, which employees qualify and after how many hours a week or day overtime starts. Check your contract or local labour rules; this calculator uses the hours and rate you enter.