How Overtime Pay is Calculated in 2026

The Basics of Overtime Pay

Under the Fair Labor Standards Act (FLSA), covered nonexempt employees must receive overtime pay for hours worked over 40 per workweek. The rate must be at least one and one-half times their regular rate of pay (often referred to as "time-and-a-half").

Who is Eligible?

Most hourly workers are eligible for overtime pay. However, some salaried employees are "exempt" from overtime rules if they meet specific criteria regarding their job duties and salary level. As of recent updates, the salary threshold for exemption has increased, meaning more workers are now eligible for overtime pay.

How to Calculate Time-and-a-Half

Calculating overtime is straightforward for a standard hourly worker:

1. Determine your regular hourly rate: Let's say it's $20/hour.
2. Calculate your overtime rate: Multiply your regular rate by 1.5. ($20 x 1.5 = $30/hour).
3. Calculate your regular pay: Multiply your regular rate by 40 hours. ($20 x 40 = $800).
4. Calculate your overtime pay: Multiply your overtime rate by the number of overtime hours worked. If you worked 5 overtime hours: ($30 x 5 = $150).
5. Add them together for your gross pay: $800 + $150 = $950.

State Laws vs. Federal Laws

While the FLSA sets the federal standard, many states have their own overtime laws. For example, some states require overtime pay for hours worked over 8 in a single day, regardless of the weekly total. When state and federal laws differ, the law that provides the greater benefit to the employee applies.