How to Calculate Overtime Pay: Formula and Examples

A simple overtime estimate multiplies an hourly rate by overtime hours and an overtime multiplier.

Estimated overtime pay = Hourly rate × Overtime hours × Multiplier

For example, an hourly rate of $20, 5 overtime hours, and a 1.5x multiplier gives:

$20 × 5 × 1.5 = $150

Use the Overtime Calculator to run this general estimate quickly.

Overtime pay formula

For a basic calculation, use three inputs:

• Hourly rate: the base hourly amount used for the estimate.
• Overtime hours: the number of hours to which the overtime multiplier applies.
• Multiplier: for example 1.5x or 2x, when that multiplier is appropriate for the situation.

Formula:

Hourly rate × Overtime hours × Multiplier

This gives the estimated pay attributable to those overtime hours. It does not automatically calculate taxes, deductions, benefits, bonuses, or jurisdiction-specific payroll rules.

Time-and-a-half example

Suppose:

• Hourly rate: $24
• Overtime hours: 6
• Multiplier: 1.5

First calculate the overtime hourly rate:

$24 × 1.5 = $36

Then multiply by overtime hours:

$36 × 6 = $216

Estimated overtime pay is $216.

Double-time example

Suppose:

• Hourly rate: $22
• Overtime hours: 4
• Multiplier: 2

$22 × 4 × 2 = $176

Estimated overtime pay is $176.

A 2x multiplier is not a universal overtime rule. Use the multiplier that actually applies under the relevant employment agreement, policy, or law.

Overtime pay vs total gross pay

Overtime pay is only one part of gross pay for a period.

For a simple hourly example, total gross pay may be thought of as:

Regular pay + Overtime pay

If someone works 40 regular hours at $20 per hour plus 5 overtime hours at 1.5x:

• Regular pay: 40 × $20 = $800
• Overtime pay: 5 × $20 × 1.5 = $150
• Simple gross total: $800 + $150 = $950

Real payroll calculations can be more complex when there are bonuses, shift differentials, commissions, multiple rates, paid leave, or other compensation components.

How to calculate the overtime hourly rate

When a multiplier applies to a stated hourly rate:

Overtime hourly rate = Hourly rate × Multiplier

Examples:

• $18 at 1.5x = $27 per overtime hour
• $25 at 1.5x = $37.50 per overtime hour
• $30 at 2x = $60 per overtime hour

Then multiply that overtime hourly rate by the applicable overtime hours.

What multiplier should you use?

The correct multiplier depends on the rule that applies to the worker and the hours being evaluated. WorkTools does not determine overtime eligibility or the legally required rate.

Before using an overtime estimate for payroll, confirm details such as:

• whether the worker is eligible for overtime;
• which hours qualify;
• the correct pay basis or regular-rate definition;
• whether different rules apply to weekends, holidays, daily hours, or weekly hours;
• whether a contract or collective agreement changes the calculation.

The calculator is designed for general arithmetic after those inputs are known.

Overtime and salaried employees

Being paid a salary does not, by itself, tell you whether overtime applies or how an overtime rate should be calculated. Employment classifications and overtime rules vary by jurisdiction and arrangement.

If you only want to model a percentage change in annual compensation, use the Salary Increase Calculator instead. It answers a different question: how a stated percentage raise changes a salary.

Overtime and PTO

Paid time off and overtime are separate concepts. PTO policies determine how paid leave is earned or used, while overtime rules determine how qualifying work hours are compensated.

For leave accrual math, see How to Calculate PTO Accrual or use the PTO Calculator.

Do not assume PTO hours count as worked hours for overtime purposes unless the applicable policy or rule says they do.

Common overtime calculation mistakes

Applying a multiplier to the wrong rate

A payroll rule may define the rate used for overtime differently from a simple base hourly wage. Confirm the applicable rate before calculating.

Counting the wrong hours

Not every hour outside a normal schedule necessarily qualifies for overtime. Determine the qualifying hours first, then apply the formula.

Assuming 1.5x applies everywhere

Time-and-a-half is common in some contexts, but overtime rules are not universal. The correct multiplier and threshold depend on the governing rule.

Confusing overtime pay with overtime premium

Some payroll discussions distinguish the full pay for overtime hours from only the additional premium above straight-time pay. Be explicit about which number you are calculating.

Ignoring payroll deductions

The calculator estimates gross overtime pay for the supplied inputs. It does not estimate net take-home pay.

FAQ

What is time and a half?

In simple arithmetic, time and a half means multiplying the relevant hourly rate by 1.5. Whether that multiplier applies is a separate policy or legal question.

How do I calculate 5 overtime hours at 1.5x?

Multiply hourly rate × 5 × 1.5. At $20 per hour, the result is $150.

Does the calculator include regular hours?

The WorkTools overtime tool estimates overtime pay from the overtime inputs. Add regular pay separately if you need a simple gross-pay total.

Does overtime affect taxes?

Overtime compensation can affect gross taxable earnings, but tax withholding and final tax outcomes depend on the applicable tax system and payroll setup. This calculator does not estimate taxes.

Estimate overtime pay

Enter the hourly rate, overtime hours, and applicable multiplier in the Overtime Calculator. Verify the eligibility rules and payroll definitions that apply before using the result for an actual payroll decision.