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How Overtime Pay Is Calculated

Overtime usually means any hours worked above a set weekly threshold are paid at a higher rate, most commonly 1.5 times (time and a half) your normal hourly pay. The maths is straightforward once you split your hours into regular and overtime.

The basic rule

Hours up to the threshold (often 40 a week) are paid at your normal rate. Hours above it are paid at the overtime multiplier, usually 1.5x. Some employers and regions use different thresholds or higher multipliers (double time), so check your contract or local rules.

The formula

Total pay = (regular hours x rate) + (overtime hours x rate x 1.5)

Split your total hours at the threshold. If you worked 48 hours with a 40-hour threshold, that is 40 regular and 8 overtime.

Worked example

Hourly rate 18, worked 48 hours, threshold 40, multiplier 1.5. Regular pay = 40 x 18 = 720. Overtime pay = 8 x 18 x 1.5 = 216. Total = 936 for the week. The 8 overtime hours earned 27 per hour instead of 18.

Time and a half vs double time

Time and a half (1.5x) is the most common overtime rate. Double time (2x) sometimes applies to holidays, very long shifts, or hours beyond a second threshold, depending on the employer or jurisdiction. Always confirm which multiplier applies to your situation before relying on a figure.

Common mistakes

  • Applying the multiplier to all hours - only hours above the threshold get the higher rate.
  • Using a monthly threshold - overtime is almost always assessed weekly, not monthly.
  • Forgetting salaried-employee rules - some salaried roles are exempt from overtime; check eligibility.
  • Ignoring a higher contractual rate - your agreement may set a better multiplier than the legal minimum.

Use the Overtime Calculator

The Overtime Calculator splits your hours at the threshold and shows regular pay, overtime pay, and the weekly total, so you can check your payslip or work out what a week of extra hours is really worth.

Frequently asked questions

Is overtime calculated daily or weekly?

Most commonly weekly: hours above the weekly threshold are overtime. Some places also have a daily overtime rule (for example, above 8 hours in a day). Rules vary by country and state, so check what applies to you.

Do salaried employees get overtime?

Sometimes. It depends on whether the role is classed as exempt or non-exempt under local employment law and the terms of the contract. Many salaried professional roles are exempt, but not all - verify before assuming.

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