Overtime Pay Calculator
Enter your hourly rate, the hours you worked this week and any nondiscretionary bonus earned in the week. The calculator applies the FLSA regular-rate rule and annualizes the result.
Gross Pay This Week
$980.00
Overtime Hours
6
Regular Rate
$20.00
Overtime Rate per Hour
$30.00
Straight-Time Pay and Bonus
$920.00
Overtime Premium
$60.00
Annual Pay at This Level
$50,960.00
How it works
Under the Fair Labor Standards Act, a non-exempt employee is owed at least one and a half times their regular rate for every hour over 40 in a workweek. The workweek is a fixed 168-hour period; hours are not averaged across weeks, and daily hours do not matter federally.
The regular rate is not always the hourly rate. A nondiscretionary bonus, one promised in advance for production, attendance or quality, is part of pay for every hour worked that week. The regular rate is the straight-time pay plus the bonus, divided by all hours worked. The overtime premium is then half that regular rate (or the full regular rate at double time) for each overtime hour.
The annual figure multiplies this week's pay by the weeks you enter, so it is the yearly pay if every one of those weeks looked like this one.
Formula
overtime hours = max(0, hours worked − 40) straight time = hourly rate × hours worked + bonus regular rate = straight time ÷ hours worked overtime premium = (multiplier − 1) × regular rate × overtime hours weekly pay = straight time + overtime premium annual pay = weekly pay × weeks per year
Example
The Department of Labor's own example (29 CFR 778.110): at $12 an hour for 46 hours, straight time is $552 and the premium is 6 × $6 = $36, so the week pays $588.
Add a $46 production bonus and the regular rate becomes ($552 + $46) ÷ 46 = $13.00. The premium is 6 × $6.50 = $39, so the week pays $637, or $33,124 over 52 such weeks.
Assumptions and limitations
- This is an estimate for planning. It is for informational and educational purposes and is not financial, tax or legal advice, and it is not a determination of what an employer owes under the law.
- It assumes you are non-exempt under the FLSA. Many salaried executive, administrative and professional employees, and some other occupations, are exempt from overtime.
- Overtime is counted only over 40 hours in the workweek, the federal rule. Some states (California, for example) also require daily overtime or double time; the double-time option applies the multiplier to all hours over 40 and does not model daily rules.
- The bonus is treated as earned entirely in this week. A bonus that covers several weeks must be spread back over those weeks (29 CFR 778.209), which this calculator does not do.
- All hours are paid at one hourly rate. Work at two or more rates in one week uses a weighted average regular rate, which is not modelled.
- Figures are gross pay before tax. The annual figure assumes every week matches this one.
Frequently asked questions
Is overtime pay tax-free now?
Not exactly. For 2025 to 2028, the FLSA half-time premium (the extra half in time and a half, not the whole overtime wage) can be deducted on your federal return, up to $12,500 a year ($25,000 on a joint return), reduced once modified AGI exceeds $150,000 ($300,000 joint). Married people filing separately cannot claim it. Only the half-time premium the FLSA requires qualifies: at double time, the Overtime Premium shown here is twice the qualified amount, and premiums paid only under a contract or state law do not count. Social Security and Medicare still apply, and state treatment varies. The deduction is claimed on your return; to have it reflected in your paychecks during the year, you can include it as a deduction in Step 4(b) of a 2026 Form W-4.
Does my bonus really raise my overtime rate?
If it is nondiscretionary, yes. A bonus promised for meeting a target is part of the regular rate (29 CFR 778.208–778.211), so overtime hours in the weeks it covers are owed at one and a half times the higher rate. A truly discretionary bonus, such as an unannounced holiday gift whose amount is at the employer's sole discretion, is excluded.
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