Understanding Your Overtime Pay
Under the Fair Labor Standards Act (FLSA), most non-exempt employees are entitled to overtime pay at one and a half times their regular hourly rate for any hours worked beyond 40 in a workweek. This is commonly known as "time and a half." Some employers or union agreements may offer double time (2× the regular rate) for holidays, weekends, or hours beyond a certain threshold.
The key distinction is between exempt and non-exempt employees. Non-exempt workers — typically hourly employees or salaried workers earning below the FLSA salary threshold ($35,568/year in 2026) — must receive overtime pay. Exempt employees, usually salaried workers in executive, administrative, or professional roles above the threshold, are not entitled to overtime under federal law.
Your overtime earnings are taxed at the same rates as your regular income. There is no special "overtime tax rate." However, because overtime increases your total annual income, it may push some of your earnings into a higher marginal tax bracket. This is why your effective hourly rate for overtime — what you actually take home per overtime hour — is often less than 1.5× your regular after-tax hourly rate.
Some states have additional overtime rules. California, for example, requires daily overtime (time and a half after 8 hours in a day, double time after 12 hours). Alaska requires overtime after 8 hours per day for most workers. Always check your state's specific overtime laws, as they may provide greater protections than federal law.
This calculator uses 2026 federal income tax brackets, FICA rates (Social Security at 6.2% up to $176,100, Medicare at 1.45%), and simplified state income tax rates to estimate your after-tax overtime earnings. It shows your effective overtime hourly rate so you can see exactly what each overtime hour is worth to you after all deductions.