Hard work deserves just compensation—especially when employees go above and beyond.
That’s why the United States has federal statutes that require employers to provide overtime pay in certain circumstances. Known as “time and a half,” this pay structure also incentivizes employers not to overwork their team.
This article will define what time and a half is and how to calculate it based on hours worked.
How does time and a half work? Explaining overtime pay
Time and a half pay compensates employees at 50% more than their regular hourly rate for every overtime hour worked. Employers owe this increased rate of pay to nonexempt employees in the U.S. for every hour worked beyond 40 in a workweek.
The Fair Labor Standards Act (FLSA) regulates overtime in the U.S. According to the FLSA, employers can designate any fixed 168-hour period as a workweek—so long as it’s regular and recurring—and this period can vary between employees. Employers can’t average time between weeks, meaning an employee who works 60 hours one week and 20 hours the next is still owed time and a half for their overtime during the first week. Time and a half is generally paid out at the end of the pay period when it was accrued.
So, is overtime always time and a half? Although U.S. labor laws only require time and a half, some businesses incentivize overtime with a higher rate, such as double time pay.
Who qualifies for time and a half, and when?
Some employees are exempt from time and a half pay requirements. The FLSA lays out strict definitions of exempt and nonexempt workers.
Exempt employees
As of January 1, 2025, salaried employees are exempt from time-and-a-half pay if they earn a minimum gross salary of $1,128 per workweek or $58,656 annually. The Department of Labor will adjust this figure every three years starting in July 2027.
Salaried employees’ job duties are also considered when determining whether they’re exempt. The following roles are not subject to overtime pay, assuming they meet FLSA criteria:
- Executives
- Administrative employees
- Learned and creative professionals
- Computer-based work
- Outside sales
Depending on the industry, exemptions also apply for specific hourly and commissioned workers. Check the Department of Labor website for more information.
Nonexempt employees
Salaried employees who make less than $1,128 per week or $58,656 annually are nonexempt, assuming they don’t work in any of the previously listed roles.
Generally speaking, hourly wage earners are nonexempt.
In some states, daily and weekly thresholds apply even if an employee doesn’t work a 40-hour week. For example, workers in California are entitled to time and a half for any hours beyond eight in a single workday, plus double time after 12 hours. They are also owed time and a half for the first eight hours worked on the seventh day of a workweek, plus double time after eight hours.
Work on federal holidays doesn’t automatically qualify an employee for time and a half pay, although some state and local jurisdictions may mandate it.
How to calculate time and a half
To calculate time and a half pay per hour, you simply multiply an employee’s hourly wage by 1.5 for each overtime hour worked. However, calculations look slightly different for salaried employees, workers who are paid hourly, and those who receive bonuses.
Here’s how to determine total compensation for employees who work overtime:
Calculating time and a half for hourly employees
In this time and a half example, imagine the employee’s standard hourly rate is $20. To calculate how much time and a half is, multiply by 1.5, like so:
$20 x 1.5 = $30
Now, take the time-and-a-half pay rate and multiply it by the number of overtime hours the employee worked to find the total overtime pay. Let’s say our example employee worked five hours of overtime.
$30 x 5 = $150
Finally, add the employee’s regular wages to their overtime pay to find the amount owed for the week. Because our example employee earns $20 per hour and works 40 standard hours in a week, the calculation would look like this:
$20 x 40 = $800
$800 + $150 = $950
And there you have it—the weekly overtime wage calculation for an hourly employee.
Calculating time and a half for salaried employees
Before you can determine how much overtime pay a nonexempt salaried employee has earned, you must calculate their standard hourly rate of pay. To do so, divide their weekly salary by the number of hours in a standard workweek.
For our example, assume their weekly wage is $800. The calculation would look like this:
$800 ÷ 40 = $20
Then, the process is the same as before. Multiply their hourly wage by 1.5 and then by the number of overtime hours worked. This time, let’s say the employee worked 10 hours of overtime.
$20 x 1.5 = $30
$30 x 10 = $300
Finally, add their weekly salary to their overtime pay to get their gross weekly pay.
$800 + $300 = $1,100
This salaried employee’s total compensation for the week should be $1,100.
Calculating time and a half with bonuses
Nondiscretionary bonuses are counted as part of hourly wages when determining time and a half pay. The bonus is split up across the week it was granted as if part of the worker’s hourly rate.
The first step is calculating the worker’s total earnings without time and a half pay. For this example, imagine an hourly wage employee who worked 44 hours in a week. They typically earn $20 per hour.
$20 x 44 = $880
However, the manager was away that week, and the employee handled some of their duties, too. Whenever this happens, the employee’s contract states they receive a $30 bonus for their extra work. Add this bonus to their total earnings before overtime adjustment.
$880 + $30 = $910
Dividing this figure by the number of hours worked will yield the employee’s actual hourly rate for the week.
$910 ÷ 44 = $20.68 per hour
Next, multiply the adjusted hourly rate by 40, the regular number of working hours in the week, to determine their total non-overtime pay.
$20.68 x 40 = $827.20
Now, calculate the adjusted overtime pay rate by multiplying the actual hourly rate by 1.5.
$20.68 x 1.5 = $31.02
Finally, you calculate the employee’s overtime pay and add it to their non-overtime pay to get their total compensation for the week. Remember, they worked 44 hours, meaning four hours of overtime.
$31.02 x 4 = $124.08
$124.08 + $827.20 = $951.28
For going beyond the call of duty, this hourly employee has earned $951.28 this week.
Tips for calculating time and a half
Calculating time and a half pay is relatively straightforward, but there are often additional factors to consider. Here’s our advice for ensuring accurate overtime payments:
- Avoid employee misclassification: Ensure your employees are correctly classified as exempt or nonexempt from the FLSA’s overtime pay rules. Criteria for exemption include the industry your company operates in, employees’ total compensation, and their job duties.
- Research state and local laws: States and municipalities may have their own rules regarding time and a half pay, minimum wage, and maximum weekly hours worked.
- Include nondiscretionary bonuses: A discretionary bonus (i.e., one that is given spontaneously without prior agreement or specific criteria) doesn’t count toward an employee’s hourly rate when calculating overtime pay. Conversely, any pre-agreed bonus (aka a nondiscretionary bonus) must be included when calculating the regular rate of pay.
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FAQ
What is the time and a half overtime rate?
The time and a half rate is an FLSA-mandated minimum amount companies must pay nonexempt employees for every overtime hour worked. It’s 1.5 times the employee’s standard hourly rate.
Companies can choose to pay more. Double time is another common overtime rate.
What are the exceptions to time and a half rules?
Employees must be exempt from earning overtime, usually determined by whether they’re salaried, earn over a certain amount every month, and perform specific duties.
How does time and a half benefit employees?
Time and a half benefits employees by giving them more money for working unusually long hours. It also disincentivizes employers from overworking staff members while still providing flexibility during high-volume periods.
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