How to Calculate Overtime Pay: A Step-by-Step Breakdown

Overtime pay confuses a lot of people, not because the math is hard, but because the rules vary so much by employer and jurisdiction. This article breaks the calculation down into three simple inputs and walks through a complete example.

The three numbers you need

Every overtime calculation rests on three values: your total hours worked for the period, the overtime threshold (the number of hours after which overtime kicks in), and the overtime multiplier (how much extra you're paid per overtime hour, commonly time-and-a-half).

Step 1: Find your total hours

Add up every hour worked across the week, including partial hours. If you worked 8.5 hours on Monday, 9 hours on Tuesday, 8 hours on Wednesday, 8 hours on Thursday, and 9.5 hours on Friday, your weekly total is 43 hours.

Step 2: Split regular hours from overtime hours

With a standard 40-hour threshold, the first 40 hours are regular hours and anything beyond that is overtime. In our example, that's 40 regular hours and 3 overtime hours.

Step 3: Apply the multiplier

A common overtime multiplier is 1.5x, often called "time and a half." If your hourly rate is $20, your regular pay is 40 × $20 = $800. Your overtime pay is 3 × $20 × 1.5 = $90. Your total gross pay for the week is $890.

Daily overtime vs. weekly overtime

Some jurisdictions and union contracts calculate overtime daily rather than weekly — for example, any hours worked beyond 8 in a single day count as overtime, regardless of the weekly total. If that applies to you, you'll need to check each day against the daily threshold separately rather than only looking at the weekly sum.

Double-time

A smaller number of jurisdictions and contracts also include a "double-time" tier, where hours beyond a second, higher threshold are paid at 2x instead of 1.5x. If this applies to your job, you'll be calculating three tiers instead of two: regular, overtime, and double-time.

Worked example with our calculator

Rather than tracking thresholds and multipliers by hand, you can enter your daily start and end times into our work hours calculator, set your overtime threshold and multiplier once, and the regular-hours, overtime-hours, and gross pay figures all update automatically as you adjust any value.

A quick checklist

Before trusting any overtime calculation, confirm: which threshold applies (daily, weekly, or both), what multiplier your employer uses, whether any unpaid breaks have already been subtracted from your hours, and whether your jurisdiction has special rules for your industry. Getting these four details right is most of the work.