How Overtime Pay Is Calculated
Overtime pay is your regular hourly rate multiplied by the overtime multiplier, applied to the overtime hours worked. The most common rate is 1.5× (time and a half), meaning each overtime hour earns 50% more than a regular hour.
Regular Pay = Regular Hours × Hourly Rate
OT Pay = OT Hours × (Hourly Rate × OT Multiplier)
OT Premium = OT Hours × Hourly Rate × (OT Multiplier − 1)
Total Weekly Pay = Regular Pay + OT Pay
Effective Hourly Rate = Total Pay ÷ Total Hours Worked
The OT premium is the extra amount above what those hours would have paid at the base rate. It is not the same as total OT pay.
OT Premium vs OT Pay
At $25/hr with 8 OT hours at 1.5×: OT pay is $300. But the premium — the extra above base — is only $100 (0.5× × 8h × $25). The other $200 is simply base-rate pay for those 8 hours. The premium is what overtime actually costs your employer beyond normal labour cost.
Double-Time Tier
Some contracts or awards pay 2× after a further threshold — for example after 12 hours in a day, or for Sunday working. This calculator allows you to split OT hours between the overtime multiplier rate and the double-time rate, correctly isolating each component.
| Rate | Reg Hrs | OT Hrs | Multiplier | OT Pay | OT Premium | Total Weekly |
| $20/hr | 40 | 5 | 1.25× | $125 | $25 | $925 |
| $20/hr | 40 | 5 | 1.5× | $150 | $50 | $950 |
| $25/hr | 40 | 8 | 1.5× | $300 | $100 | $1,300 |
| $25/hr | 40 | 8 | 2.0× | $400 | $200 | $1,400 |
| $30/hr | 40 | 10 | 1.5× | $450 | $150 | $1,650 |
Frequently Asked Questions
What is the most common overtime multiplier?+
Time and a half (1.5×) is the statutory minimum for overtime in the United States under the FLSA for hours over 40 per week, and is widely used in many other countries as the contractual baseline. Double time (2×) is common on Sundays and public holidays in some contracts and in countries including Australia. In the Netherlands and across much of Europe, the rate is set by collective labour agreements and may vary significantly by sector.
Is overtime taxed differently from regular pay?+
No. Overtime income is taxed at the same marginal rate as your regular income in most countries. Because overtime increases your total pay for the period, it may cause a higher withholding in that pay period if it pushes you into a higher bracket temporarily, but the overall annual tax liability is the same as if the income had come from regular hours.
What is the difference between overtime pay and the overtime premium?+
Overtime pay is the total amount earned for the overtime hours at the higher rate. The overtime premium is only the extra portion above what those hours would have paid at the regular rate. For 8 hours at $25/hr with a 1.5× multiplier, overtime pay is $300 but the premium is only $100. The remaining $200 is simply normal compensation for those hours of work. Understanding this distinction matters when comparing job offers that include different amounts of overtime.
How does working overtime regularly affect my annual earnings?+
Consistently working overtime has a compounding effect on annual earnings. At $25/hr base with 8 OT hours per week at 1.5×, the OT premium alone adds $100 per week. Over 50 working weeks that is $5,000 in pure premium, plus $10,000 for the base pay on those 400 extra hours. The total annual uplift from that pattern is $15,000 compared to a 40-hour week — a 15% increase on a $100,000 base salary equivalent.
Does this calculator apply to salaried employees?+
This calculator uses an hourly rate. Salaried employees who receive overtime should first convert their salary to an equivalent hourly rate using the Salary Converter. Whether a salaried employee is eligible for overtime depends on their country, contract, and earnings level. In the US, salaried employees below the FLSA salary threshold are eligible for overtime. In many European countries, professional salaried employees are typically exempt from statutory overtime requirements, with any additional pay governed by their employment contract.