Start with the regular hourly rate
For many hourly jobs, the regular rate of pay is the baseline for overtime calculations. The federal Fair Labor Standards Act generally requires covered, nonexempt employees to receive at least one and one-half times the regular rate for hours worked over 40 in a workweek. The regular rate can involve compensation beyond a simple stated hourly wage, and exemptions or special industry rules may apply.
A practical example with six overtime hours
Suppose your normal wage is $24 per hour and you work 40 regular hours and 6 overtime hours at 1.5×. Regular wages would be 40 × $24, or $960. The overtime rate would be $36 per hour, so six overtime hours would add $216. The gross total for that week would be $1,176. The overtime premium above the normal rate is $72 ($12 extra per overtime hour × 6).
Why weekly hours, not just the pay period, matter
Under the usual federal rule, the calculation focuses on a defined workweek. A two-week payroll period does not automatically make the overtime threshold 80 hours combined: a week with 45 worked hours and another with 35 should be reviewed using weekly rules, subject to applicable exceptions. Employers also need to distinguish time actually worked from paid leave when applying certain overtime rules.
Overtime deductions and tax treatment
Overtime is still part of gross wage income. Its effect on payroll withholding depends on Form W-4, withholding tables, other income, and payroll practices. Special federal tax deductions for eligible overtime compensation introduced for certain tax years have their own rules and limitations, and do not mean every overtime dollar is automatically tax-free. Our paycheck estimator does not automatically apply these special deductions.
How to verify your pay
Compare the hours and rates shown on your time record and paystub. Ask payroll how the regular rate was determined when commissions, bonuses, or shift premiums are involved. For legal information consult the US Department of Labor overtime resource.
Use the Overtime Pay Calculator for a transparent gross-pay estimate and the 2026 US Paycheck Calculator for a broader tax illustration.
This guide is educational, not individualized tax or legal advice. Updated November 9, 2026.