Worked example: $24/hour, 40 regular + 6 overtime hours
Regular pay is $960 (40 × $24). The overtime rate is $36 (24 × 1.5), so 6 OT hours add $216. Weekly gross is $1,176 — the 6 extra hours boosted pay by 22.5% while adding only 15% more hours. Over a 4-week busy stretch that is $864 of overtime premium on top of $3,840 of straight time.
- • OT is computed per workweek — averaging two weeks is not allowed under FLSA.
- • A nondiscretionary production bonus must be folded into the regular rate before computing 1.5×.
- • Comp time in lieu of OT pay is generally not legal for private-sector non-exempt staff.
Who is exempt?
Exemption depends on both salary level and duties. As of the 2025 federal update, employees earning under $58,656/year generally must be paid overtime regardless of title. Above that, executive, administrative, and professional duties tests apply. Job titles never decide exemption — actual duties do. When in doubt, treat the employee as non-exempt.
FAQ
Is overtime over 8 hours a day or 40 a week?
Federal law uses 40 hours per workweek. A few states — California, Alaska, Nevada, and Colorado under conditions — also require daily overtime after 8 or 12 hours. You pay whichever rule gives the employee more, not both.
Do salaried employees get overtime?
Yes, if they are non-exempt — typically those earning below the federal threshold or whose duties fail the exemption tests. Their regular rate is salary divided by expected hours, and OT pays 1.5× that rate.
Is overtime taxed more?
No. Overtime is ordinary income and taxed at the same marginal rates. It can push you into a higher bracket on the margin, but there is no special OT tax. Higher withholding on a big check is a cash-flow artifact, not a penalty.
Can an employer require overtime?
Generally yes for adults under federal law, as long as OT is paid correctly. Some states restrict mandatory OT in specific industries (healthcare is the common one), and contracts or union agreements can override.
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