How Overtime Works
A simple explanation of overtime pay and how to estimate it.
What overtime means
Overtime is extra pay for hours worked beyond a certain threshold. In many cases, that threshold is 40 hours in a workweek.
A common overtime rule is time-and-a-half, which means each overtime hour is paid at 1.5 times your normal hourly rate.
How overtime pay is calculated
First, separate your total hours into regular hours and overtime hours.
Regular hours are paid at your normal hourly rate. Overtime hours are paid using the overtime multiplier.
Example
If you make $20 per hour and work 45 hours in a week, then 40 hours are regular and 5 hours are overtime.
Your regular pay would be 40 × $20 = $800. Your overtime pay would be 5 × $20 × 1.5 = $150. Your total pay would be $950.
Why this matters
Understanding overtime helps you estimate your paycheck, double-check your hours, and catch mistakes before payday.
It is especially useful if your schedule changes from week to week or if you regularly work extra shifts.