Time and a Half Calculator

What Time and a Half Actually Means

Time and a half is an overtime rate equal to 1.5 times the regular hourly rate. An employee earning 20 dollars an hour earns 30 dollars for every overtime hour. The arithmetic is trivial. What causes errors is not the multiplication, it is deciding which hours qualify and what the regular rate is.

Worked example. An employee paid 22 dollars an hour works 46 hours in a single workweek. The first 40 hours pay 40 x 22, which is 880 dollars. The 6 overtime hours pay 6 x 33, which is 198 dollars. Total gross for the week is 1,078 dollars.

The Federal Rule: Over 40 Hours in a Workweek

Under the federal Fair Labor Standards Act, covered non-exempt employees must be paid at least one and a half times their regular rate for all hours worked over 40 in a single workweek. There is no federal daily overtime rule, and there is no federal requirement for extra pay simply because a shift falls on a weekend, a holiday or a night.

The workweek is a fixed seven day period

A workweek is a fixed and regularly recurring period of 168 consecutive hours, seven consecutive 24 hour periods. It does not have to start on Monday or align to the calendar week, but once an employer sets it, it stays put. Overtime is calculated inside each individual workweek.

Two week pay periods cannot be averaged

This is the rule most often broken by accident. If a pay period covers two workweeks, each workweek is evaluated on its own. An employee who works 50 hours in the first week and 30 in the second has worked 80 hours in the pay period, but that does not make the overtime disappear. Week one produced 10 overtime hours, and those 10 hours must be paid at time and a half. Week two simply pays 30 straight hours. Averaging the two weeks to 40 and 40 is not permitted under federal law.

Hours worked, not hours paid

Overtime is based on hours actually worked. Paid time off, holiday pay and sick pay are generally not hours worked, so a week with 8 hours of holiday pay and 36 hours worked totals 44 paid hours but no federal overtime, because only 36 hours were worked. Employers may pay overtime more generously than the law requires, and many union contracts and company policies do exactly that.

The Regular Rate of Pay

Overtime is not calculated on the base hourly rate in every case. It is calculated on the regular rate of pay, which includes most forms of compensation for the week, not just the posted wage.

Non-discretionary bonuses count toward the regular rate. That covers production bonuses, attendance bonuses, safety bonuses, shift differentials and any bonus promised in advance for meeting a target. A truly discretionary bonus, decided after the fact with no promise beforehand, generally does not. Neither do gifts, most reimbursed expenses, or discretionary profit sharing plan contributions.

Worked example. An employee paid 20 dollars an hour works 45 hours and earns a 100 dollar production bonus for the week. Straight-time earnings are 45 x 20, which is 900, plus the 100 dollar bonus, giving 1,000 dollars for 45 hours. The regular rate is 1,000 divided by 45, which is 22.22 an hour. The overtime premium is 0.5 x 22.22 x 5, which is 55.56. Total pay for the week is 1,055.56, not the 1,050 that a simple 1.5 x 20 calculation would give.

Double Time and Where It Applies

Double time is twice the regular rate. Federal law does not require it in any circumstance. Where it appears, it comes from one of three places.

• State law. California requires double time after 12 hours in a workday, and for all hours over 8 on the seventh consecutive day of work in a workweek.
• Union contracts. Collective bargaining agreements commonly set double time for holidays, Sundays or hours beyond a defined threshold.
• Company policy. Employers may offer double time voluntarily, often for holidays or emergency call-ins, and once promised it is generally enforceable as a term of employment.

Daily Overtime and State Rules

Several states add rules on top of the federal 40 hour standard. California is the best known: non-exempt employees there generally get time and a half for hours over 8 in a workday, time and a half for the first 8 hours on the seventh consecutive day of a workweek, and double time beyond 12 hours in a day. Alaska, Nevada and Colorado also have forms of daily overtime, and Colorado adds a weekly threshold below 40 in some cases.

Where state and federal rules differ, the rule more favorable to the employee applies. That means a California employee working 10 hours on Monday earns 2 hours of daily overtime even if the weekly total never reaches 40. Rules also differ on meal and rest periods, on the seventh day, and on how the regular rate is computed, so the state where the work is performed matters more than where the employer is based.

Exempt Versus Non-Exempt

Overtime rules apply to non-exempt employees. Exempt employees are not entitled to federal overtime. Exemption is not a matter of being paid a salary or holding a particular job title. It generally requires all of the following: payment on a salary basis, a salary at or above the applicable threshold, and job duties that fit one of the recognized exemption categories such as executive, administrative, professional, outside sales or certain computer roles.

A salaried employee whose duties do not meet an exemption test is still non-exempt and still owed overtime. Salary alone does not remove the right to overtime pay, and a job title such as manager or coordinator carries no weight on its own. Salary thresholds are periodically revised and some states set higher thresholds than the federal one.

Overtime Rate Reference Table

Comp Time, Rounding and Other Traps

• Comp time. Private sector employers generally cannot substitute paid time off for overtime pay. Public sector employers can, under specific conditions, at a rate of one and a half hours off per overtime hour.
• Off the clock work. Time spent working before or after a shift, through an unpaid meal break, or on required remote tasks is hours worked and counts toward the 40 hour threshold.
• Unauthorized overtime. Overtime that was worked must be paid even if it was not approved in advance. Employers can discipline for violating a policy, but they cannot withhold the pay.
• Rounding. Time rounding is permitted only if it is neutral over time and does not systematically favor the employer.
• Two rates in one week. An employee working at two different hourly rates in the same week generally has a weighted average regular rate for overtime purposes.

The arithmetic itself never changes: multiply by 1.5 for time and a half, by 2 for double time, and count each workweek separately. The judgment calls are which hours count and what the regular rate includes.