Overtime Pay Calculator for Small Business Payroll

Under federal law, a nonexempt employee who works 46 hours at $24 an hour with a $92 production bonus is owed $1,274.00 for the week, not $1,196 plus $144 of “time and a half” on the base rate. The Fair Labor Standards Act (FLSA) requires 1.5 times the regular rate for every hour over 40 in a workweek, and the regular rate has to include nondiscretionary bonuses. The calculator below does the math the way the Department of Labor describes it.

Overtime pay calculator

How federal overtime is calculated

The Department of Labor’s Fact Sheet #23 sets out the core rules:

• The threshold is weekly. Overtime is owed for hours over 40 in a workweek. A workweek is a fixed, recurring 168-hour period (seven consecutive 24-hour periods), and it can start on any day and hour you choose.
• No averaging. Each workweek stands alone. You can’t offset 46 hours in one week with 34 in the next.
• The rate is 1.5 times the regular rate, not necessarily 1.5 times the base hourly wage.
• Weekends and holidays aren’t special under federal law. The FLSA doesn’t require extra pay for weekend or holiday work as such; only hours over 40 count.
• It can’t be waived. An agreement or a “no overtime” policy doesn’t cancel overtime pay for overtime actually worked.

The regular rate includes most bonuses

The regular rate is all pay for the week’s work divided by the hours worked. Fact Sheet #56C says nondiscretionary bonuses belong in it: bonuses based on production or a formula, quality, attendance or safety. Expense reimbursements, true gifts and bonuses that are discretionary in both timing and amount are excluded.

The calculation then works in two layers. Every hour is already paid once at straight time, including the bonus, so overtime adds only the half-time premium on top:

1. Straight-time pay = hourly rate × all hours + bonus
2. Regular rate = straight-time pay ÷ all hours
3. Overtime premium = regular rate × 0.5 × hours over 40
4. Total pay = straight-time pay + overtime premium

Worked example

With the calculator’s sample week: $24 × 46 hours = $1,104, plus the $92 bonus, gives $1,196 of straight-time pay. The regular rate is $1,196 ÷ 46 = $26.00, so time and a half is $39.00. The premium is $26.00 × 0.5 × 6 = $78.00, and the week’s gross pay is $1,274.00.

Ignoring the bonus would put the premium at $72.00, $6.00 short for one week. Over a year of regular bonuses and overtime, that gap adds up, and unpaid overtime can be claimed as back wages.

Employees with two pay rates

If someone works at two rates in the same week, for example $22 for installs and $28 for service calls, Fact Sheet #23 says the regular rate is generally the weighted average of all pay for the week divided by all hours. To use the calculator, enter the weighted average in the hourly rate field: total straight-time earnings for the week divided by total hours.

Double time and state overtime rules

Federal law doesn’t require double time. Some states do, and many add daily overtime. California is the best-known example: its Labor Commissioner’s Office lists time and a half for hours over 8 in a workday and over 40 in a workweek, and double time for hours over 12 in a workday (and over 8 on the seventh consecutive workday).

The calculator models only the federal weekly rule. If your state, union agreement or company policy requires double time, enter those hours in the double-time field and the calculator adds the extra half on top of time and a half. For daily overtime rules, total the overtime hours your state requires and check the result against your payroll provider.

Overtime and the new federal tax deduction

From tax year 2025 through 2028, employees can deduct some overtime pay on their federal income tax return, and from 2026 employers report it on Form W-2. Only the FLSA-required premium counts, which is the number this calculator shows as the “half”. We cover what employers must track in our guide to no tax on overtime for employers.

Keep overtime from eating your margin

Overtime isn’t only a payroll line. It raises your labor cost per billable hour, so a price that worked at 40 hours can lose money at 50. Feed the real cost into the hourly rate calculator or the job cost calculator. If overtime comes from poor routing rather than real demand, scheduling software for small field teams is usually cheaper than paying time and a half.

Frequently asked questions

How do you calculate time and a half? Multiply the regular rate by 1.5. If the regular rate is $26.00, time and a half is $39.00 an hour. Because straight time is already paid for every hour, the extra owed for each overtime hour is half the regular rate.

Do bonuses count toward overtime? Nondiscretionary bonuses do, according to the Department of Labor: production, quality, attendance and safety bonuses must be included in the regular rate. Bonuses that are discretionary in both timing and amount, and not promised in advance, can be excluded.

Is overtime calculated daily or weekly? Under federal law, weekly: hours over 40 in a workweek. Some states, such as California, also require daily overtime.

Is double time required by law? Not under federal law. Some states require it in specific cases, for example California for hours over 12 in a workday.

Can I pay overtime the following week? Fact Sheet #23 says overtime is generally paid on the regular payday for the pay period in which it was earned. You can’t average hours across two weeks to avoid it.