How overtime pay works
Federal law, the Fair Labor Standards Act, requires at least one and a half times your regular rate for every hour over 40 in a workweek, if you are a covered non-exempt employee. Hours are counted week by week; a short week doesn't offset a long one.
$25 an hour, 48 hours in one week.
Regular pay: 40 × $25 = $1,000. Overtime rate: $25 × 1.5 = $37.50.
Overtime pay: 8 × $37.50 = $300. Total: $1,300 for the week.
Daily overtime and double time in California
California's Labor Commissioner requires time and a half for hours over 8 in a workday and over 40 in a workweek, and for the first 8 hours on the seventh consecutive day of work. Double time is due for hours over 12 in a workday and over 8 on the seventh consecutive day. Employers can adopt an alternative workweek schedule, such as four 10-hour or three 12-hour days, which changes when daily overtime starts; ask HR if you work one. Other states set their own rules; check your state labor department.
How much of your overtime is tax-free?
For 2025 through 2028, the extra half of time-and-a-half pay, the premium, can be deducted from your federal taxable income, up to $12,500 a year ($25,000 on a joint return). Only hours over 40 in a workweek count; California-style daily overtime in a week under 40 hours doesn't. The deduction also phases out at higher incomes. In the example above, the premium is 8 × $12.50 = $100 a week. See how much tax your overtime saves with the no tax on overtime calculator.
Common questions
How do I calculate time and a half? Multiply your regular hourly rate by 1.5. At $20 an hour, time and a half is $30. Then multiply that by your overtime hours: 6 hours of overtime pays $180.
When do I get overtime pay? Under the federal Fair Labor Standards Act, covered non-exempt employees get at least time and a half for hours over 40 in a workweek. Some states go further: California also requires overtime after 8 hours in a workday and double time after 12.
How do I calculate double time? Multiply your regular rate by 2. At $20 an hour, double time is $40 an hour. Federal law doesn't require double time; it comes from state law, a union contract or employer policy.
Is overtime taxed more? No. Overtime is taxed at the same rates as your other pay. A big overtime check can have more withheld because payroll treats it as if you earned that much every pay period, but the yearly tax is the same. For 2025 through 2028, the extra half of time-and-a-half pay can also be deducted.
Does salaried mean no overtime? Not always. Exempt employees, usually salaried executives, administrators and professionals above a salary threshold, don't get overtime under federal law. Salaried employees who don't meet the exemption tests are still owed overtime.
Updated November 5, 2026. Sources: Fair Labor Standards Act, 29 U.S.C. §207; California Labor Commissioner, overtime FAQ (dir.ca.gov); Internal Revenue Code §225.