Overtime:

# Determining Overtime Pay Rate

The **U.S. Department of Labor** defines overtime as hours worked over 40 in the course of a standard workweek. For employees who aren't exempt from U.S. labor laws, those **overtime hours** should be compensated at time-and-a-half, aka 1.5 times an employee’s regular rate of hourly pay.

Workers that are paid an hourly rate can **calculate their overtime pay rate** very simply: multiply your normal hourly wage by 1.5. That is the amount you should be paid for any overtime you work.

**Calculating overtime pay rates for salaried employees** takes a few more steps, but is simple nevertheless:

- First, divide your yearly salary (including regular commissions and bonuses) by 52. This is your gross weekly salary.
- Divide that number by 40, the maximum number of non-overtime hours in a workweek. This is your gross hourly rate.
- Multiply your hourly rate by 1.5. This final number is your
**rate of overtime pay**, before taxes.

If salaried employees want a better idea of the net earnings (after taxes) they’ll make for **overtime pay**, they can divide a normal paycheck by the maximum straight hours during that pay period. In other words, if you get paid every two weeks, divide it by 80 (two 40-hour weeks). Then, multiply that number by 1.5.