What is Overtime (OT)?
In case you're not familiar with the term, overtime (often referred to as "OT") is a term typically used to describe the excess of hours worked beyond 40 hours per week.
Your employer is required by federal law (Fair Labor Standards Act) to pay time and a half wages (regular hourly rate x 1.5) for all hours worked beyond 40 hours per week.
So if your regular hourly rate is $8.00, and you work 50 hours during a given workweek, you will end up receiving $120.00 in overtime wages ($8.00 x 1.5 = $12.00 x 10 OT hours = $120.00) for that week -- which is in addition to the 40 hours of regular wages.
Note that your state may offer greater overtime benefits (contact your state wage law office from this List of State Labor Offices) and your employer may offer higher benefits (more than 8 hours per day, double time, etc.) as part of their incentive package.
Also, note that the U.S. Department of Labor provides an interactive FLSA Overtime Calculator Advisor that will walk you through the various stages and possible exemptions involved in determining you or your employees' overtime rate and wages.
How to Calculate Overtime Rate
To calculate your overtime rate of pay, you convert the overtime description into a decimal number and multiply your regular rate of pay by the decimal multiplier.
| OT Description | Decimal Multiplier |
|---|---|
| Time and a quarter | 1.25 |
| Time and a third | 1.33 |
| Time and a quarter | 1.25 |
| Time and a half | 1.50 |
| Double time | 2.00 |
| Double time and a half | 2.50 |
Example Overtime Rate Calculation
If your regular hourly rate is $12.00, and you're paid time and a half for overtime, your overtime rate would be $18.00 ($12.00 x 1.50).
Interactive Overtime Chart
The following overtime chart answers the question, "What is time and a half for $X.XX an hour?" and contains the most common searched-for hourly wages, but you can update the chart to suit your preferences.
| Overtime Conversion Chart | |
|---|---|
| Regular Wage | Time and a half |
| $7.00 | $10.50 |
| $7.50 | $11.25 |
| $8.00 | $12.00 |
| $8.50 | $12.75 |
| $9.00 | $13.50 |
| $9.50 | $14.25 |
| $10.00 | $15.00 |
| $10.50 | $15.75 |
| $11.00 | $16.50 |
| $11.50 | $17.25 |
| Regular Wage | Time and a half |
| $12.00 | $18.00 |
| $12.50 | $18.75 |
| $13.00 | $19.50 |
| $13.50 | $20.25 |
| $14.00 | $21.00 |
| $14.50 | $21.75 |
| $15.00 | $22.50 |
| $15.50 | $23.25 |
| $16.00 | $24.00 |
| $16.50 | $24.75 |
| Regular Wage | Time and a half |
| $17.00 | $25.50 |
| $17.50 | $26.25 |
| $18.00 | $27.00 |
| $18.50 | $27.75 |
| $19.00 | $28.50 |
| $19.50 | $29.25 |
| $20.00 | $30.00 |
| $20.50 | $30.75 |
| $21.00 | $31.50 |
| $21.50 | $32.25 |
| Regular Wage | Time and a half |
| $22.00 | $33.00 |
| $22.50 | $33.75 |
| $23.00 | $34.50 |
| $23.50 | $35.25 |
| $24.00 | $36.00 |
| $24.50 | $36.75 |
| $25.00 | $37.50 |
| $25.50 | $38.25 |
| $26.00 | $39.00 |
| $26.50 | $39.75 |
| Regular Wage | Time and a half |
| $27.00 | $40.50 |
| $27.50 | $41.25 |
| $28.00 | $42.00 |
| $28.50 | $42.75 |
| $29.00 | $43.50 |
| $29.50 | $44.25 |
| $30.00 | $45.00 |
How to Calculate Overtime Hours
If you're not sure how to add overtime hours, here are the steps:
- Convert the minute portion of each day's work time to a decimal number (see formula below).
- If a day's work time exceeds 8 hours (or 10 hours), subtract 8 from the converted time to get the overtime for that day.
- Add up all overtime decimal numbers to get the total overtime hours for the pay period.
Time to Decimal Conversion Formula
Decimal time = hours + (minutes ÷ 60)| Example Overtime Hours Calculation | ||
|---|---|---|
| Day Time | Decimal | Overtime |
| 8:00 | 8.00 | 0.00 |
| 8:45 | 8.75 | 0.75 |
| 9:15 | 9.25 | 1.25 |
| 10:30 | 10.50 | 2.50 |
| 8:15 | 8.25 | 0.25 |
| Total Overtime Hours: | 4.75 | |
From there you would multiply your total overtime hours by your overtime rate to get your overtime pay for the pay period ($18.00 x 4.75 = $85.50).
Who determines your rate of pay?
As it applies to all hourly rates of pay, you are the one who ultimately determines how much compensation you receive from one hour of work.
If you spend the wages earned from one hour of work on a non-essential product or service, you have effectively limited your hour's worth of work to its face value.
In other words, if you earn $10 for 1 hour of work, and you spend it on a movie ticket, you have limited your wage for that hour to $10.
On the other hand, if you were to invest the $10 you received for one hour of work, you could effectively double, triple, (or more) your wage depending on the rate of return you earn and on how long you leave the wage invested.
How to Double Your Overtime Rate
So how do you double your overtime rate? The same way you would double your normal hourly rate. Invest your overtime wages and leave them invested until they double in value.
Enter a rate of return in the following form and click the "Calculate Time to Double" button to see how long it will take to double your overtime wages if you invest them instead of spending them.
The cool thing is, once your overtime investment has doubled, you can then withdraw your original overtime wage and leave the balance to continue to increase your compensation from that one hour of work.
Or, if you want to see your overtime rate multiply at maximum speed, use your overtime wages to pay off high-interest debt and then redirect that paid-off debt payment into an investment.
But again, if you use your overtime wages to splurge on non-essentials, it is you who is limiting your compensation, not your employer.