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What is overtime pay?
Do you get paid for overtime working hours?
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How do you calculate overtime pay for salaried employees?
Overtime pay is the rate of payment employees receive for working extra hours in addition to their regular working hours. For instance, if the standard working hours in your state is 40 hours and you’ve worked for 45 hours, you’ll receive an extra payment for 5 hours.
- Overview
- What is overtime pay?
- How does overtime pay work?
- Types of overtime
- How to calculate overtime pay
When you work beyond the standard 40-hour workweek, you may be eligible for overtime pay. While national and local guidelines regulate overtime pay, it may be useful to learn about the general way overtime pay works. Understanding it can help you determine your eligibility and predict how much you can expect to earn when you put in overtime hours a...
Overtime pay refers to the compensation you receive for working beyond normal working hours. For example, if you're eligible to receive overtime pay and your standard workweek is 40 hours, working 50 hours in a given week means you can earn overtime pay for those 10 extra hours. Your overtime eligibility depends on your weekly earnings and how many...
Exempt vs. nonexempt employees
Employees fall under one of two classifications: exempt and nonexempt. Here's some information for both:
Overtime pay rules
According to the Department of Labor (DOL), as of Jan. 1, 2020, employees who earn less than $684 per week or $35,568 per year have federal overtime protection, even if they're considered exempt. Federal law requires employers to pay employees an overtime rate of at least time and a half their regular pay rate. For example, if you typically earn $20 per hour, your overtime pay amounts to $30 per hour. As of May 20, 2020, employers also may give incentives or bonuses to salaried, nonexempt employees whose hours vary per week, per the DOL.Some employers offer double-time pay, which is double the amount you usually receive for the regular hours you worked. For example, if you typically get paid $10 per hour, double-time pay earns you $20 for each overtime hour worked. You may receive double-time pay if you work on a federal holiday or for working overtime. Unlike regular overtime, the FLSA doesn't have a requirement for double-time pay.Related: 21 Ways To Make Extra Money
Some employers may require overtime as stated in your employment contract. Others may offer it as an option where there's extra work to be done. Understanding how your workplace handles overtime may help you establish your expectations. Here are some other types of overtime:
•Time off in lieu (TOIL): Some employers give their employees additional time off to compensate for long hours. The employer and employee work together to schedule this time off.
•Voluntary overtime: This refers to overtime work your employer offers that you're free to accept or decline without penalty. Employees who accept receive overtime pay in exchange for their additional work.
•Compulsory overtime: Compulsory overtime, or mandatory overtime, has provisions within the terms of your contract. Though it's in the contract, employers still follow overtime regulations to remain compliant.
•Nonguaranteed overtime: This is overtime that your employer may or may not offer. If overtime is made available, you are required to work those hours as indicated in the terms of your contract.
Related: What Is PTO? Definition, Types and Tips
1. Learn if you're exempt
Determine whether you classify as a nonexempt or an exempt employee based on FLSA criteria. Consider any exceptions to these regulations for some industries and jobs. If FLSA regulations are inapplicable to you, you may be able to make arrangements with your employer to earn extra pay.Related: What Does an Exempt Employee Actually Mean?
2. Determine your weekly hours
Keep track of your hours each week, especially if you tend to work irregular or split shifts. If you use a timesheet to report your hours to your employer, it's easier to monitor your hours compared to weekly pay. Review your hours over the workweek and if you've worked over 40 hours, you can expect your paycheck to include overtime pay.Related: What Are the Average Hours Worked Per Week? (Plus Factors)
3. Find your hourly pay rate
If you're an hourly employee, you likely already know your hourly pay rate. If you're salaried, start by calculating your weekly pay. To do this, divide your salary by 52 for the number of weeks in a year.Example: If you earn a salary of $50,000 per year, divide this figure by 52 to arrive at a weekly pay amount of about $962 before taxes. If you're working the standard 40 hours per week, divide your weekly pay amount by 40 to determine your hourly rate, which is $24.Related: Hourly to Salary Calculator: How To Convert Your Wages
Jan 24, 2024 · What is overtime pay? Employees who work more than 40 hours a week are entitled to a higher pay rate for the additional work. This is called overtime pay. Federal overtime laws...
- Andrew Martins
Jul 1, 2024 · Overtime refers to hours that an employee works beyond their typical scheduled working hours. A standard workweek is considered 40 hours total, with employees working eight hours per day.
Jul 2, 2024 · When you work over a specified number of hours per day or week, the extra hours you work are referred to as overtime. While you receive regular pay for working your regular schedule, any additional hours you work come at a higher pay rate.
Jun 23, 2021 · Takeaways. What is overtime? Overtime occurs when an employee exceeds their regular weekly working hours. More specifically, overtime refers to nonexempt employees who clock more than 40 hours in a workweek.
Apr 10, 2023 · Overtime pay, also referred to as overtime wages, is the additional compensation provided to employees for working beyond their regular hours. When employees work more than the standard or agreed-upon workweek, they become eligible for overtime pay.
