How to Calculate Overtime Pay (With Bonuses and Salaried Examples)
The federal overtime rule in plain English, how to find the regular rate, and worked examples, sourced from the U.S. Department of Labor.
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Not legal advice. This covers the federal rule. Your state may require more. Check your state labor department.
Quick answer: Under federal law, covered non-exempt employees get at least 1.5 times their regular rate for every hour over 40 in a workweek (DOL Fact Sheet #23). The regular rate is total pay for the week (minus a few excluded payments) divided by total hours worked, so it's not always just the hourly wage.
Try it with our overtime calculator.
The rules that matter
From DOL Fact Sheet #23 and the DOL overtime calculator advisor:
- It's per workweek. A workweek is a fixed, recurring 168-hour period (seven 24-hour days). It can start on any day and hour.
- No averaging. Each workweek stands alone. 30 hours one week and 50 the next means 10 overtime hours in the second week, even if you're paid every two weeks.
- Weekends and holidays aren't automatically overtime. Federal law doesn't require premium pay for Saturdays, Sundays, or holidays as such. Only hours over 40 count.
- Overtime is usually paid on the regular payday for the period the hours were worked.
Step 1: Find the regular rate
$$ \text{regular rate} = \frac{\text{total pay for the workweek (minus excluded payments)}}{\text{total hours actually worked}} $$
Per DOL Fact Sheet #56A, the regular rate can't be below the federal minimum wage, or a higher state or local minimum wage where one applies.
What's left out (Fact Sheet #23): reimbursed expenses, overtime premiums themselves, true premiums for weekend or holiday work, discretionary bonuses, gifts, and pay for time off like vacation, holidays, or sick days.
That means a non-discretionary bonus goes into the regular rate. Per DOL Fact Sheet #56C, that includes production bonuses based on a set formula, quality and accuracy bonuses, attendance bonuses, safety bonuses, and bonuses announced to get people to work more efficiently. A bonus only counts as discretionary if both whether it's paid and how much are decided solely by the employer at or near the end of the period, with no prior promise (Fact Sheet #56A).
Step 2: Pay the overtime
$$ \text{overtime pay} = \text{overtime hours} \times 1.5 \times \text{regular rate} $$
Example 1: simple hourly
An employee earns $20 an hour and works 46 hours.
- Straight time: 40 × $20 = $800
- Overtime: 6 × $30 = $180
- Total: $980
Example 2: hourly plus a non-discretionary bonus
Same employee, 46 hours, plus a $92 production bonus.
- Straight-time pay for all hours: 46 × $20 = $920, plus $92 bonus = $1,012
- Regular rate: $1,012 ÷ 46 = $22.00
- Overtime premium (the extra half): 6 × $11.00 = $66
- Total: $1,012 + $66 = $1,078
Because the straight-time pay already covers every hour once, you only add the extra half-time for the overtime hours.
Example 3: salaried non-exempt with a fixed longer week
This one comes straight from DOL. An employee is hired for a 45-hour week at a $405 weekly salary. The regular rate is $405 ÷ 45 = $9.00. The salary already covers all 45 hours at straight time, so the employer owes an extra half-time for the 5 overtime hours: 5 × $4.50 = $22.50 (Fact Sheet #23).
States with daily overtime
Federal law only counts hours over 40 in a workweek. These states also require overtime after a set number of hours in a single day. Each rule was checked on an official state source.
| State | Rule | Source |
|---|---|---|
| Alaska | 1.5x after 8 hours in a workday or after 40 in a workweek. Doesn't apply to employers with fewer than four employees, approved flexible work hour plans (up to 10 hours a day), or other exempt jobs listed in the statute. | Alaska Stat. §23.10.060 |
| California | 1.5x after 8 hours in a workday or after 40 in a workweek. Double time: 2x for hours over 12 in a workday, and for hours over 8 on the 7th consecutive workday in a workweek. Seventh day: 7th consecutive workday in a workweek: 1.5x for the first 8 hours, 2x after 8. Exempt employees and approved alternative workweek schedules follow different rules. | Cal. Labor Code §510 |
| Colorado | 1.5x after 12 hours in a workday or after 40 in a workweek. Work over 12 consecutive hours is also overtime even if it spans two workdays; this calculator doesn't model that case. Daily and weekly overtime aren't added together: the larger total applies. Some jobs are exempt. | COMPS Order #40, 7 CCR 1103-1, Rule 4.1 |
| Nevada | 1.5x after 8 hours in a workday or after 40 in a workweek. Daily overtime (over 8 hours) applies only to employees paid less than 1.5 times the Nevada minimum wage, and not to a mutually agreed 4 × 10-hour schedule. Higher-paid employees get weekly overtime only. Small businesses (under $250,000 a year in gross sales) and some jobs are exempt. | NRS 608.018 |
For other states, we haven't recorded a state daily-overtime rule. The federal over-40 rule still applies to covered employees, and some states have their own weekly rules or exemptions, so check your state labor department. Our overtime calculator and time card calculator apply these state rules for you.
Keeping it right every week
Most overtime mistakes come from bad hour totals. Our free time card calculator totals clock-in and clock-out times for the week. If you run payroll for several people, payroll software with built-in time tracking can save time and errors. Gusto includes time tracking with its payroll (Gusto).
FAQ
Are salaried employees exempt from overtime?
Not automatically. Job titles and being paid a salary don't decide it. To be exempt as an executive, administrative, or professional employee, the job generally has to meet DOL's duties tests and pay a salary of at least $684 a week (DOL Fact Sheet #17A). DOL confirmed in May 2026 that this 2019 level is the one in force (DOL news release).
Can I give comp time instead of overtime pay?
The FLSA only allows comp time instead of overtime pay for employees of state and local government agencies, under set conditions (DOL Fact Sheet #7, 29 CFR Part 553). A private business should plan to pay overtime in cash.
Do I have to pay daily overtime?
Not under federal law, which only counts hours over 40 in a workweek. Some states do; see States with daily overtime above.
Sources: U.S. Department of Labor. Last checked Oct 11, 2026.