How overtime pay is calculated
Overtime is your regular hourly rate times a multiplier:
- Time and a half: rate × 1.5. At $25 an hour that’s $37.50.
- Double time: rate × 2. At $25 an hour that’s $50.
Your gross pay for the period is regular hours × rate, plus overtime hours × 1.5 × rate, plus double-time hours × 2 × rate. The calculator splits the check into those three parts so you can see where the money comes from.
Example. $25 an hour, paid every two weeks, 80 regular hours and 10 overtime hours:
- Regular: 80 × $25 = $2,000
- Overtime: 10 × $37.50 = $375
- Gross: $2,375
The overtime premium is the part of overtime pay above your normal rate: 10 hours × $12.50 = $125. On double-time hours the premium is a full extra hour’s pay. The premium matters in 2026 because it is the part the new federal overtime deduction is based on.
The federal 40-hour rule
The Fair Labor Standards Act (FLSA) requires overtime at no less than 1.5 times the “regular rate” for every hour a non-exempt employee works over 40 in a workweek. A few points that often trip people up:
- The workweek is a fixed, repeating 7-day period set by the employer. Hours aren’t averaged across two weeks, even if you’re paid every two weeks: 50 hours one week and 30 the next still means 10 overtime hours.
- Federal law doesn’t require overtime for working more than 8 hours in a day, on weekends or on holidays. Those come from state law or your employer’s policy.
- Paid time off that you didn’t work (vacation, holidays, sick days) usually doesn’t count toward the 40 hours.
- Many salaried employees are “exempt” and don’t get overtime. Exemption depends on your duties and pay, not just your title.
- The regular rate can include non-discretionary bonuses and shift differentials, which can make your real overtime rate higher than 1.5 × your base rate.
California daily overtime
California has stricter rules than the federal minimum. Non-exempt employees there earn:
- 1.5× for hours over 8 in a workday, and for hours over 40 in a workweek;
- 2× for hours over 12 in a workday;
- on the seventh consecutive day of work in a workweek, 1.5× for the first 8 hours and 2× after that.
So a California worker who puts in four 10-hour days gets 8 overtime hours (2 a day) even though the week totals exactly 40. If a day runs to 13 hours, that day has 4 hours at 1.5× (hours 9 to 12) and 1 hour at 2×. Count your hours under those rules, then enter the totals here. A handful of other states and some union contracts also pay daily overtime; check your own state’s rules.
Taxes on an overtime check
Overtime is regular wages, so it goes through the same federal and state withholding formulas as the rest of your pay. Social Security (6.2% up to the yearly wage base) and Medicare (1.45%) apply to every dollar.
Because withholding treats each check as if it were a normal pay period repeated all year, a big overtime check can be withheld at a higher rate than your yearly tax would justify. That isn’t extra tax: it’s settled on your return, and any overpayment comes back as a refund.
The 2026 overtime deduction
From 2025 through 2028, federal law lets eligible workers deduct qualified overtime on their return: only the FLSA-required premium, capped at $12,500 ($25,000 on a joint return) and reduced at higher incomes. It doesn’t change your paycheck unless you claim it on your W-4, it doesn’t apply to Social Security or Medicare, and premium paid only because of a state rule such as California’s daily overtime generally doesn’t qualify. The no tax on overtime calculator estimates what it’s worth to you.
Limits of this calculator
It shows one paycheck with a standard W-4 and no pre-tax deductions such as 401(k) or health insurance. For those, use the main paycheck calculator.