How overtime pay works
Overtime is pay for hours beyond a standard threshold, usually at a higher rate. The calculation has two parts: regular hours paid at the normal rate, and extra hours paid at the normal rate multiplied by an overtime factor.
The most common factors are 1.25, 1.5 and 2. Employers, contracts and in some places the law decide which hours qualify. Some rules count hours per day instead of per week, and some give double time on holidays or after very long shifts.
A worked example
Suppose you earn 20 an hour and work 50 hours in a week, of which 10 are overtime at time and a half. Your regular pay is 40 × 20 = 800. Your overtime rate is 30 an hour, so overtime pay is 10 × 30 = 300. Total pay for the week is 1,100.
Divided over 50 hours, that is an average of 22 an hour. If you worked like this every week of the year, the gross total would be 57,200. The average hourly figure is useful for comparing an overtime-heavy job with a fixed-hours one.
Is overtime worth it?
More pay is not always more take-home. Extra income may push part of your earnings into a higher tax band, and costs such as commuting or childcare rise with longer hours. Look at the average hourly rate after tax rather than the headline figure.
Also consider rest. Working long hours for an extended period can affect health and safety, and some countries limit average weekly working time by law.
What this calculator does not include
It does not model tax, deductions, shift allowances, bonuses or rules that vary by state or country. Use it for a quick estimate, and check your payslip or employer for the exact result.
Questions people ask
How is overtime pay calculated?
Multiply your regular hourly rate by the overtime multiplier, then by the overtime hours. At 20 an hour, time and a half is 30 an hour, so 10 overtime hours add 300 to your regular pay.
What is time and a half?
It means 1.5 times your normal hourly rate. In the US, most hourly employees covered by federal law must be paid at least this rate for hours worked over 40 in a week. Double time is 2 times the normal rate.
Do all workers get overtime?
No. Rules depend on the country, your contract and your job. In the US, some salaried and managerial roles are exempt. In the UK there is no general statutory right to overtime pay, so it depends on your contract. Check your own terms or local labour authority.
Is the result before or after tax?
It is gross pay, before income tax, social security and other deductions. Extra earnings can be taxed at your normal marginal rate, so your take-home increase will be smaller than the figure shown.
How do I work out overtime for a salaried employee?
Convert the salary to an hourly rate first, for example annual salary divided by hours worked in a year, then apply the multiplier. The hourly-to-salary calculator does that conversion.