Overtime Pay, Explained

Overtime is simple in theory — time and a half over 40 hours — and full of quiet gotchas in practice. Here's what actually counts toward the 40, who qualifies, where "double time" comes from, and the myth that overtime is taxed at some punishing rate.

The 40-hour rule

Under federal law, non-exempt employees earn 1.5× their regular rate for hours worked beyond 40 in a single workweek. The key word is worked: it's based on hours actually on the clock in a fixed seven-day week, not on a two-week pay period. So 45 hours one week and 35 the next is 5 hours of overtime — even though the two-week total is 80. The overtime pay calculator does this math for any rate and hours.

What counts toward the 40 — and what doesn't

Only hours worked count. Paid time off, holidays, and sick days generally do not count toward the 40, even though you were paid for them. That surprises people: a week with a paid holiday and 36 worked hours usually triggers no overtime, because only 36 hours were actually worked. Short breaks typically count as worked time; a genuine unpaid meal break does not.

Time and a half vs. double time

Federal law requires time and a half — it does not require double time. "Double time" comes from state laws (California is the big one, for very long days or seventh consecutive days) or from a union contract or employer policy. So unless your state or contract says otherwise, don't expect 2× — 1.5× is the floor. See exactly what the premium adds with the time-and-a-half calculator.

Do salaried workers get overtime?

Sometimes. It hinges on whether you're "exempt" or "non-exempt," which depends on your duties and a salary threshold — not on being salaried alone. A salaried employee paid below the threshold, or whose job duties don't meet the exemption tests, can still be owed overtime. Being on salary is not automatic permission to work you unlimited hours for free. We unpack that split in salaried vs. hourly.

The big myth: overtime is NOT taxed at a higher rate

This one costs people peace of mind for no reason. Overtime dollars are taxed exactly like regular dollars. What can happen is that a big overtime week pushes that single paycheck into a higher withholdingbracket for the moment, so more is held back — but it's reconciled when you file, and you get any excess back. The money isn't taxed more; it's sometimes withheld more, temporarily. If you're weighing whether extra shifts are worth it after taxes, the is-overtime-worth-it calculator gives you the honest take-home answer.

The takeaway

Overtime is 1.5× for hours truly worked over 40 in a week, PTO doesn't count toward the 40, double time is a state/contract perk rather than a federal right, some salaried workers qualify, and none of it is taxed at a special rate. Know those five points and no overtime check will ever look wrong to you again. For where those extra dollars land after everything else comes out, start at Paycheck 101.