How overtime pay works
Overtime is paid at a premium above your regular rate. The most common is time-and-a-half (1.5×): an extra 50% for each overtime hour. Some situations pay double time (2×) — holidays, excessive hours, or certain union agreements. Your overtime pay is simply regular rate × multiplier × overtime hours, added to your regular pay.
When does overtime kick in?
Rules vary by country and region. In the US, federal law generally requires time-and-a-half for hours worked beyond 40 in a week for non-exempt employees; some states add daily overtime (e.g. beyond 8 hours in a day). Salaried "exempt" employees often don't qualify. Always check your local labour laws and employment contract — this calculator handles the math once you know your rules and multiplier.
The value of overtime hours
Overtime is one of the few ways an hourly worker earns a premium rate, which is why it can meaningfully boost income. At $20/hour, eight overtime hours at 1.5× adds $240 — a 30% bump on top of a $800 regular week. But weigh it against the real cost: fatigue, lost personal time, and (in progressive tax systems) a slightly higher marginal tax rate on the extra income. Overtime is valuable; unlimited overtime is often a sign a role is understaffed.
A tax note
Overtime pay isn't taxed at a special higher rate — it's ordinary income. It can appear to be taxed more if a big overtime week pushes that paycheck into higher withholding, but at year-end it's all reconciled as normal income. The figures here are gross (pre-tax); your take-home depends on your tax situation.