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Overtime Pay in 2026: Federal Baseline and Calculation Examples
Review the federal overtime baseline, calculation examples, exemption limits, and the state or contract rules that may change the result.
Overtime rules depend on worker coverage, duties, pay method, state law, and sometimes a contract or collective-bargaining agreement. The examples below explain the federal baseline; they are not a determination that a particular worker is exempt or nonexempt.
Federal Overtime Rules (FLSA)
The Fair Labor Standards Act (FLSA) sets the federal baseline:
- Overtime kicks in after 40 hours in a workweek
- Overtime rate: 1.5× regular rate ("time and a half")
- Workweek: any fixed, recurring 168-hour (7-day) period
- Current standard salary level: $684/week ($35,568/year) for the federal executive, administrative, and professional exemptions, together with the applicable salary-basis and duties tests
The U.S. Department of Labor explains that a federal court vacated the 2024 final rule. The Department therefore applies the 2019 threshold, not the invalidated $1,059/week figure. Review the current DOL salary-level page before relying on any threshold.
How to Calculate Overtime Pay
Basic Formula
Example: Hourly Employee
- Regular rate: $20/hour
- Hours worked: 48 hours in one week
- Regular pay: 40 × $20 = $800
- Overtime pay: 8 × $30 ($20 × 1.5) = $240
- Total gross pay: $1,040
Example: Salaried Non-Exempt Employee
- Weekly salary: $900 (for 40-hour week)
- Regular hourly rate: $900 ÷ 40 = $22.50
- Hours worked: 45 hours
- Overtime: 5 × $33.75 ($22.50 × 1.5) = $168.75
- Total gross pay: $1,068.75
State Overtime Rules (Key Differences)
Some states have overtime rules that are more protective than the federal baseline. The examples below are only a starting point; exemptions, alternative workweeks, industries, collective-bargaining agreements, and current state rules can change the result.
| State | Daily OT Threshold | Weekly OT Threshold | Double Time? |
|---|---|---|---|
| Federal (FLSA) | None | 40 hours | No |
| California | 8 hours/day | 40 hours/week | Yes (12+ hrs/day) |
| Colorado | 12 hours/day | 40 hours/week | No |
| Alaska | 8 hours/day | 40 hours/week | No |
| Nevada | 8 hours/day | 40 hours/week | No |
| Oregon | None | 40 hours/week | No |
California's Unique Rules
California generally includes daily overtime and double-time rules, subject to exemptions and exceptions:
- Over 8 hours/day: 1.5× pay
- Over 12 hours/day: 2× pay (double time)
- 7th consecutive day: 1.5× for first 8 hours, 2× after 8 hours
- Over 40 hours/week: 1.5× pay
Who Is Exempt from Overtime?
Not every employee is covered by the same overtime rule. The federal executive, administrative, and professional exemptions generally require the salary-basis, salary-level, and duties tests to be satisfied. Other exemptions have different requirements.
Salary Basis Test
For the standard federal executive, administrative, and professional exemptions, the currently enforced level is $684/week ($35,568/year). Salary alone never establishes an exemption.
Salary Level Test
The worker generally must receive a predetermined salary that is not reduced because of variations in the quality or quantity of work, subject to permitted deductions.
Duties Test
Must perform exempt job duties in one of these categories:
| Exemption | Primary Duty |
|---|---|
| Executive | Managing the enterprise or department, supervises 2+ employees |
| Administrative | Office work directly related to management policies |
| Professional | Work requiring advanced knowledge (doctors, lawyers, engineers) |
| Computer | Certain computer employees who meet the regulatory duties and compensation tests |
| Outside Sales | Making sales outside the employer's premises |
How Overtime Appears on Your Pay Stub
On a properly formatted pay stub, overtime should be listed separately:
Key things to verify:
- OT rate reflects the applicable rule and the correctly calculated regular rate
- OT hours are correct (compare to your time records)
- California workers: check for double time (DOT) at 2× rate if applicable
Common Overtime Mistakes
By Employers
- Misclassifying employees as exempt — just giving someone a salary doesn't make them exempt
- Averaging hours across weeks — can't combine a 35-hour week and 45-hour week to avoid OT
- Not counting all hours — pre-shift meetings, required training, and on-call time may count
- Substituting time off without checking the rule — compensatory-time rules differ between public and private employment
By Employees
- Working unauthorized OT — even if unauthorized, worked OT must be paid
- Not tracking hours — keep your own records to verify your pay stubs
- Assuming salary = exempt — salary status alone doesn't determine exemption
Frequently Asked Questions
Is overtime taxed more?
No. Overtime is taxed at the same rates as regular income. It may *seem* like more tax is taken because the higher gross pay may push the paycheck into a higher withholding bracket, but your annual effective tax rate remains the same.
Can my employer force me to work overtime?
In most states, yes. Federal law allows employers to mandate overtime. However, they must pay you the proper overtime rate. Some union contracts and state laws may limit mandatory overtime in specific industries.
What if my employer doesn't pay overtime?
You can review complaint options with the U.S. Department of Labor's Wage and Hour Division or the relevant state labor agency. Deadlines and available remedies depend on the facts and law, so obtain current guidance promptly.
Does overtime count toward Social Security?
Yes. All overtime earnings are subject to Social Security tax (up to the wage base of $184,500) and Medicare tax. This means overtime actually increases your future Social Security benefits.
Can I calculate my overtime with your tool?
The workspace lets you enter regular and overtime hours and rates, but it does not determine whether a worker is exempt or which federal, state, local, union, or contract rule applies. Verify eligibility and the correct rate with current U.S. Department of Labor guidance and the relevant state agency.
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