Overtime pay: time-and-a-half rules and your paycheck

Overtime is one of the few places where a paycheck can be checked with simple arithmetic. If you're paid by the hour, or you're on a salary below a set level, the law says how hours over 40 must be paid. Mistakes happen, and they're worth catching.

Who gets overtime under federal law?

• Over 40 hours in a workweek: unless you're exempt, covered employees must get overtime for hours worked over 40 in a workweek, at not less than one and a half times their regular rate (U.S. Department of Labor).
• No averaging: averaging hours over two or more weeks is not allowed. Each workweek stands alone.
• Salary doesn't automatically mean exempt. Executive, administrative and professional employees can be exempt, but only if they meet duties tests and are paid at least a minimum salary. After a 2024 increase was struck down by a federal court in Texas, the Labor Department kept the 2019 level of $684 a week ($35,568 a year), according to a May 2026 legal update.
• States can go further. Some states have stricter overtime rules than the federal minimum; where they do, the rule that pays you more applies.

A worked example

At $22 an hour, a 46-hour week should pay $880 for the first 40 hours plus 6 hours × $33.00 = $198 of overtime: $1,078. Paying every hour at $22 would give $1,012, which is $66 short.

Can an employer average hours over two weeks?

Suppose you work 30 hours one week and 50 the next. That's 80 hours over two weeks, but not "two normal weeks":

The averaged version underpays by $110. If your pay period is two weeks, check that the overtime is calculated week by week.

How do you check overtime on your paycheck?

1. Keep your own record of hours: a note on your phone with start and end times each day is enough.
2. Split the pay period into workweeks and count hours over 40 in each.
3. Compare with your pay stub: overtime hours and an overtime rate of at least 1.5× your regular rate. Our guide to reading your pay stub explains the other lines.
4. If something's off, ask payroll in writing first. Most mistakes are fixed there. If not, the Labor Department's Wage and Hour Division takes questions and complaints.

Timing matters too: overtime earned in a workweek normally has to be paid on the regular payday for that pay period, not saved up for later (U.S. Department of Labor).

What counts as a workweek?

Under the FLSA a workweek is a fixed, regularly recurring period of 168 hours, seven consecutive 24-hour periods. It doesn't have to run Monday to Sunday; your employer sets it, and it stays the same. Federal law doesn't require extra pay for Saturdays, Sundays or holidays as such. What counts is the total hours in that fixed week.

Do bonuses change your overtime rate?

Your "regular rate" isn't always just your hourly wage. Bonuses you know about and expect, such as attendance, production, quality or safety bonuses, are non-discretionary and generally must be included in the regular rate used to work out overtime (DOL Fact Sheet #56C). A truly discretionary bonus, like an unannounced holiday gift, is usually left out. If you earn a regular bonus and worked overtime in the same period, check that the overtime rate went up with it.

State rules that pay more: California

Several states set rules above the federal minimum. California is the best-known example. There, hours over 8 in a workday or 40 in a workweek are paid at 1.5 times the regular rate; hours over 12 in a workday are paid at double the regular rate; and the seventh consecutive day of work in a workweek has its own overtime rules (California Department of Industrial Relations). If you work in a state with daily overtime, a 4-day week of 10-hour days can earn overtime even though the weekly total is 40.

Is overtime pay tax-deductible now?

For tax years 2025 through 2028, eligible workers can deduct qualified overtime pay on their federal income tax return (IRS):

• What qualifies: the part of overtime pay above your regular rate, such as the "half" in time-and-a-half, when the overtime is required by the FLSA and reported on a W-2, 1099 or similar statement.
• How much: up to $12,500 a year, or $25,000 for joint filers.
• Income limit: the deduction phases out above $150,000 of modified adjusted gross income ($300,000 for joint filers).
• Who can claim it: itemizers and non-itemizers alike; you need a Social Security number on the return, and married couples must file jointly.

In the 46-hour week above, the overtime premium, the extra half, is 6 × $11.00 = $66. That's the part that counts toward the deduction, not the full $198 of overtime pay. Overtime required only by state law, or paid by employer policy beyond the FLSA, isn't covered by this deduction.

Overtime also changes what your job pays per hour of your life; our true hourly wage guide shows how to count it. If you work as a 1099 contractor, these overtime rules generally don't apply; see W-2 vs. 1099.

Assumptions: a $22 regular hourly rate, a non-exempt employee covered by the federal Fair Labor Standards Act, and no state rules that pay more. This is general information, not legal advice.

Common questions

Do I get overtime for working on a weekend or holiday?

Not under federal law as such. The FLSA counts hours over 40 in the workweek, whichever days they fall on. Some employers pay extra for weekends or holidays by policy or contract.

Can my employer give me time off instead of overtime pay?

For most private-sector employees, overtime has to be paid as money. Compensatory time off in place of overtime pay is generally limited to public-sector employers.

My bonus doesn't show up in my overtime rate. Is that right?

It depends on the bonus. Bonuses you were promised for attendance, production, quality or safety are usually non-discretionary and must be included in the regular rate used for overtime.

Is all of my overtime pay tax-free now?

No. The new federal deduction covers only the extra half of time-and-a-half required by the FLSA, up to $12,500 a year ($25,000 for joint filers), and it phases out at higher incomes. Social Security and Medicare taxes still apply.

This article is general education, not personal financial advice. Figures in worked examples are calculated from the assumptions stated with them and are not forecasts.