How to Calculate Overtime Pay in 2026 — FLSA Rules, Formula & Real Examples
The federal overtime formula is straightforward. What makes it complicated are state-specific rules, exempt vs. non-exempt status, and the new 2026 tax deduction most workers don't know about. This guide covers all of it with verified numbers.
Overtime pay = Hourly rate × 1.5 × overtime hours. Federal law (FLSA) requires 1.5x pay for all hours worked over 40 in a workweek. At $20/hr working 45 hours: regular pay = $800, overtime = $150, total = $950. California also requires overtime after 8 hours/day.
Enter your hourly rate and hours worked. Get regular pay, overtime pay, and weekly total — plus the 2026 tax deduction impact.
Open Overtime Calculator →The Overtime Formula — Step by Step
The Fair Labor Standards Act (FLSA) sets the federal minimum overtime standard. Here is the exact calculation:
Total Pay = (Regular Hours × Rate) + (Overtime Hours × Rate × 1.5)
Worked Example — $22/hr, 47 Hours
| Component | Calculation | Amount |
|---|---|---|
| Regular pay | 40 hrs × $22.00 | $880.00 |
| Overtime rate | $22.00 × 1.5 | $33.00/hr |
| Overtime pay | 7 hrs × $33.00 | $231.00 |
| Total weekly pay | $880 + $231 | $1,111.00 |
Time and a Half — Reference Table 2026
Every common hourly rate, calculated for 5, 10, and 15 overtime hours per week:
| Hourly Rate | OT Rate (1.5x) | +5 OT hrs/wk | +10 OT hrs/wk | +15 OT hrs/wk | Annual OT (10 hrs/wk) |
|---|---|---|---|---|---|
| $12.00 | $18.00 | +$90 | +$180 | +$270 | +$9,360/yr |
| $15.00 | $22.50 | +$112.50 | +$225 | +$337.50 | +$11,700/yr |
| $18.00 | $27.00 | +$135 | +$270 | +$405 | +$14,040/yr |
| $20.00 | $30.00 | +$150 | +$300 | +$450 | +$15,600/yr |
| $25.00 | $37.50 | +$187.50 | +$375 | +$562.50 | +$19,500/yr |
| $30.00 | $45.00 | +$225 | +$450 | +$675 | +$23,400/yr |
| $35.00 | $52.50 | +$262.50 | +$525 | +$787.50 | +$27,300/yr |
| $40.00 | $60.00 | +$300 | +$600 | +$900 | +$31,200/yr |
Calculated per FLSA Section 207. Annual figures assume 52 weeks of overtime at stated hours.
Who Qualifies for Overtime — Exempt vs Non-Exempt
Under FLSA, employees are either non-exempt (overtime required) or exempt (no overtime required). The distinction matters:
Non-Exempt — Must Receive Overtime
- All hourly workers covered by FLSA
- Salaried employees earning under $684/week ($35,568/year) — regardless of job title
- Most blue-collar and manual workers regardless of pay level
- First responders, paralegals, most healthcare workers
Exempt — No Overtime Required
Must meet both the salary test AND the duties test:
| Exemption Type | Salary Minimum | Primary Duty Required |
|---|---|---|
| Executive | $684/week | Management of enterprise or department; directs 2+ employees |
| Administrative | $684/week | Office/non-manual work; exercises independent judgment on significant matters |
| Professional | $684/week | Work requiring advanced knowledge (lawyers, doctors, CPAs, engineers) |
| Computer | $684/week or $27.63/hr | Systems analyst, programmer, software engineer |
| Outside Sales | No minimum | Making sales away from employer's place of business |
| Highly Compensated | $107,432/year | Performs at least one exempt duty |
Source: DOL FLSA Exemptions — salary thresholds current as of 2026.
State Overtime Rules — Where Federal Law Is Not Enough
Federal FLSA sets the minimum. Several states require overtime under conditions stricter than federal law:
| State | Daily OT Threshold | Weekly OT | 7th Consecutive Day |
|---|---|---|---|
| California | After 8 hrs (1.5x); after 12 hrs (2x) | After 40 hrs | 1–8 hrs at 1.5x; over 8 hrs at 2x |
| Alaska | After 8 hrs/day | After 40 hrs | Federal rules apply |
| Nevada | After 8 hrs (if earning ≤1.5× min wage) | After 40 hrs | Federal rules apply |
| Colorado | After 12 hrs/day | After 40 hrs | Federal rules apply |
| All other states | No daily OT rule | After 40 hrs | Federal rules apply |
Verified against individual state Department of Labor rules, June 2026.
The 2026 Overtime Tax Deduction — What Most Workers Don't Know
The One Big Beautiful Bill Act, signed into law in 2025, created a new federal tax benefit specifically for overtime workers. It is one of the most significant payroll tax changes in recent memory:
| Detail | Specifics |
|---|---|
| Deduction type | Above-the-line deduction (reduces AGI — available without itemizing) |
| Coverage period | Tax years 2025, 2026, 2027, 2028 |
| Cap — single filer | Up to $12,500 of overtime income deductible |
| Cap — married filing jointly | Up to $25,000 of overtime income deductible |
| Income phase-out | Begins at $150,000 AGI (single) / $300,000 (married) |
| Taxes still owed | Social Security (6.2%) and Medicare (1.45%) still apply to overtime |
| Qualifying OT | Must be FLSA-qualifying overtime (hours over 40/week for non-exempt employees) |
What This Means in Real Dollars
A single filer earning $20/hr working 10 hours of overtime per week:
- Annual overtime earnings: 10 hrs × $30 × 52 weeks = $15,600
- Deductible amount (capped at $12,500): $12,500
- Tax savings at 22% bracket: $2,750 less in federal taxes
Consult a tax professional for your specific situation. Figures based on 2026 tax brackets.
Common Overtime Mistakes — What Employers Get Wrong
- Averaging hours across weeks: Illegal under FLSA. Each workweek is calculated independently. Working 30 hours one week and 50 the next = 10 overtime hours owed in week two, regardless of the average.
- Comp time instead of overtime pay: Private sector employers cannot offer compensatory time off instead of overtime pay. Only government employers can do this.
- Not including all compensation in the regular rate: The overtime rate must be based on the "regular rate" which includes shift differentials, non-discretionary bonuses, and piece-rate pay — not just the base hourly rate.
- Misclassifying workers as exempt: Job title alone does not create an exemption. The duties test and salary test must both be satisfied.
Enter hourly rate, regular hours, and overtime hours. Get a complete weekly and annual breakdown including the 2026 tax deduction estimate.
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