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Basic Overtime Calculation (US Federal)
An hourly employee works 47 hours in a week at $18/hour:
Regular hours: 40 hours × $18.00 = $720.00
Overtime hours: 7 hours × $27.00 = $189.00 (1.5× rate)
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Total weekly pay: $909.00
Overtime rate: $18.00 × 1.5 = $27.00/hour
Under the US Fair Labor Standards Act (FLSA), non-exempt employees must receive 1.5× their regular rate for all hours over 40 in a workweek.
California Daily Overtime Rules
California has stricter overtime rules than federal law:
Monday: 10 hours worked
Regular: 8 hours × $20.00 = $160.00
OT (1.5×): 2 hours × $30.00 = $60.00
Tuesday: 13 hours worked
Regular: 8 hours × $20.00 = $160.00
OT (1.5×): 4 hours × $30.00 = $120.00
DT (2×): 1 hour × $40.00 = $40.00
California rules:
Over 8 hours/day: 1.5× rate
Over 12 hours/day: 2× rate
7th consecutive day: 1.5× for first 8 hours, 2× after
Salaried Non-Exempt Employee
Converting salary to hourly rate for overtime calculation:
Annual salary: $52,000
Weekly salary: $52,000 ÷ 52 = $1,000
Regular hours: 40 hours/week
Hourly rate: $1,000 ÷ 40 = $25.00/hour
Week with 48 hours worked:
Regular pay: 40 × $25.00 = $1,000.00
Overtime pay: 8 × $37.50 = $300.00 (1.5× $25)
Total: $1,300.00
Salaried non-exempt employees are entitled to overtime. The salary covers the regular rate for 40 hours — overtime hours are paid at 1.5× the derived hourly rate.
Double Time Calculation
Some contracts and states require double time for certain hours:
Employee works 14 hours on a Sunday (7th consecutive day, California):
First 8 hours: 8 × $22.00 = $176.00 (1.5× = $33.00/hr)
Wait — 7th day rule:
First 8 hours: 1.5× = $33.00/hr → 8 × $33.00 = $264.00
Over 8 hours: 2× = $44.00/hr → 6 × $44.00 = $264.00
Total for Sunday: $528.00
Standard double time (over 12 hours in a day):
Hours 1-8: $22.00/hr
Hours 9-12: $33.00/hr (1.5×)
Hours 13-14: $44.00/hr (2×)
Overtime Cost Analysis for Employers
Comparing overtime vs hiring an additional employee:
Current situation:
5 employees × 50 hours/week × $20/hr
Regular pay: 5 × 40 × $20 = $4,000
Overtime pay: 5 × 10 × $30 = $1,500
Weekly total: $5,500
Alternative — hire 1 more employee at 40 hours:
6 employees × 40 hours × $20/hr = $4,800
Plus benefits (~30%): $4,800 × 1.3 = $6,240
Overtime is cheaper by: $6,240 - $5,500 = $740/week
(But only for short-term needs — benefits cost more long-term)
Biweekly Pay Period Overtime
Overtime is calculated per workweek, not per pay period:
Biweekly pay period (2 weeks):
Week 1: 35 hours — no overtime
Week 2: 48 hours — 8 hours overtime
Calculation:
Week 1: 35 × $18.00 = $630.00
Week 2: 40 × $18.00 + 8 × $27.00 = $720.00 + $216.00 = $936.00
Biweekly total: $1,566.00
WRONG approach (averaging across pay period):
Total hours: 83 ÷ 2 = 41.5 avg — only 1.5 hours overtime per week
This is illegal — overtime must be calculated per workweek
Shift Differential with Overtime
Night shift premium affects the overtime base rate:
Employee: $18/hr base rate
Night shift differential: +$3/hr = $21/hr effective rate
Week: 44 hours (all night shift)
Regular pay: 40 × $21.00 = $840.00
Overtime pay: 4 × $31.50 = $126.00 (1.5× $21)
Total: $966.00
Note: Overtime is calculated on the total rate including differential,
not just the base rate.
Comp Time Instead of Overtime Pay
Some public sector employers offer compensatory time off:
Employee works 8 overtime hours:
Overtime pay option: 8 × $27.00 = $216.00
Comp time option: 8 × 1.5 = 12 hours of paid time off
Comp time balance tracking:
Week 1: +8 OT hours → +12 comp hours
Week 2: +4 OT hours → +6 comp hours
Week 3: Used 8 comp hours for a day off
Balance: 12 + 6 - 8 = 10 comp hours remaining
Comp time is generally only available to public sector employees under the FLSA. Private sector employers must pay overtime in cash.
International Overtime Rules
Overtime thresholds and rates vary by country:
United States:
Threshold: 40 hours/week
Rate: 1.5× for all overtime hours
United Kingdom:
Threshold: Defined in employment contract
Rate: Defined in employment contract (no statutory minimum)
Maximum: 48 hours/week average (Working Time Regulations)
Canada (Ontario):
Threshold: 44 hours/week
Rate: 1.5× for hours over 44
Australia (varies by award):
Threshold: 38 hours/week (ordinary hours)
Rate: 1.5× for first 3 overtime hours, 2× after
Germany:
Threshold: 8 hours/day, 48 hours/week
Rate: Defined in collective agreement or contract
Overtime Exemption Check
Not all employees qualify for overtime. US exemption tests:
Executive exemption (all must apply):
✓ Salary ≥ $684/week ($35,568/year)
✓ Primary duty: managing the enterprise or a department
✓ Regularly directs 2+ employees
✓ Authority to hire/fire or significant input on such decisions
Administrative exemption:
✓ Salary ≥ $684/week
✓ Primary duty: office/non-manual work related to management
✓ Exercises discretion and independent judgment on significant matters
If ANY condition is not met → employee is non-exempt → overtime required