The basic rule
Under the federal Fair Labor Standards Act (FLSA), non-exempt employees must be paid at least 1.5 times their regular rate for every hour worked over 40 in a workweek. Federal law has no daily overtime: a 12-hour Monday is not overtime on its own if the week stays at 40 hours or less.
Step by step
- Add up the hours actually worked in the workweek. Use the hours calculator with one row per shift; tick “overnight” for shifts that cross midnight.
- Subtract 40. The rest is overtime hours.
- Multiply the first 40 hours by the regular rate.
- Multiply the overtime hours by 1.5 × the regular rate.
- Add the two amounts.
What counts as a “workweek”
A workweek is any fixed, recurring period of 168 hours: seven consecutive 24-hour periods. It does not have to start on Monday; many employers start it on Sunday at midnight or at the start of a shift. What matters is that it stays the same. Two weeks cannot be averaged: 30 hours one week and 50 the next means 10 overtime hours, even though the two-week average is 40.
The regular rate is more than the hourly wage
If an employee earns a non-discretionary bonus (a production, attendance or safety bonus promised in advance) or a shift differential, it goes into the regular rate before overtime is calculated. Discretionary gifts, such as an unannounced holiday bonus, generally do not.
| Step | Calculation | Amount |
|---|---|---|
| Straight-time pay | 45 h × $20 | $900 |
| Plus the bonus | $900 + $90 | $990 |
| Regular rate | $990 ÷ 45 h | $22.00 / h |
| Overtime premium (half-time) | 5 h × $11 | $55 |
| Total for the week | $990 + $55 | $1,045 |
The half-time method works because the straight-time pay already covers 1 × the rate for all 45 hours; only the extra 0.5 × remains for the 5 overtime hours.
Rounding time clocks
The Department of Labor allows employers to round punch times to the nearest 5, 6 or 15 minutes, provided the rounding is neutral over time. Under the common “7-minute rule” for quarter hours, 1–7 minutes round down and 8–14 minutes round up. A system that always rounds in the employer’s favor is not allowed.
State rules can add daily overtime
| Where | Overtime trigger | Rate |
|---|---|---|
| Federal (FLSA) | over 40 hours in a workweek | 1.5 × |
| California | over 8 hours in a workday or 40 in a week | 1.5 × |
| California | over 12 hours in a workday | 2 × |
Several other states have their own rules. When federal and state law differ, the employee gets whichever is more generous, so check your state labor department.
Common mistakes
- Paying “straight time” for overtime because the employee agreed to it. Overtime rights cannot be waived.
- Offering comp time instead of overtime pay. In the private sector that is not allowed under the FLSA.
- Forgetting short work before or after a shift: required pre-shift meetings or closing duties are hours worked.
- Counting decimal hours wrong: 7 h 45 min is 7.75 hours, not 7.45.
Frequently asked questions
Is overtime calculated per day or per week?
Under federal law, per workweek: hours over 40. Some states, such as California, also have daily overtime.
Do paid holidays and PTO count toward 40 hours?
Not under the FLSA. Only hours actually worked count, although some employers or union contracts include them voluntarily.
How do I convert minutes to decimal hours?
Divide the minutes by 60. 15 minutes = 0.25, 30 = 0.5, 45 = 0.75.
Can I add up a week of shifts online?
Yes. The hours calculator adds one row per shift, subtracts breaks and shows the total in hours and decimal hours.
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