How to Calculate Overtime Pay
Overtime pay rewards hours worked beyond a standard threshold. Under the federal Fair Labor Standards Act (FLSA), non-exempt employees must receive at least 1.5 times their regular rate of pay for hours over 40 in a workweek.
Overtime Pay = Overtime Hours × Hourly Rate × Multiplier
Example: 10 OT hours at $25/hr × 1.5 = $375
Some states go further. California requires daily overtime: time worked beyond 8 hours in a day is paid at 1.5x, and beyond 12 hours at 2x. Alaska, Nevada, and Colorado also have daily overtime rules. This calculator uses the federal 40-hour weekly rule by default, but you can adjust the multiplier to model state-specific premiums.
Gross Pay vs Net Pay: What's the Difference?
Gross pay is everything you earn before anything is taken out — your hourly rate times hours worked, plus overtime and any bonuses. Net pay (take-home) is what actually lands in your bank account after mandatory and voluntary deductions.
- Federal income tax — withheld based on your W-4 and progressive brackets.
- State income tax — varies by state; some states have none.
- FICA — Social Security and Medicare.
- Pre-tax deductions — 401(k), HSA, health insurance.
- After-tax deductions — Roth contributions, garnishments, union dues.
How Payroll Taxes Work
Three main taxes reduce your gross paycheck:
- Federal income tax — progressive; only the portion of income in each bracket is taxed at that rate.
- State income tax — ranges from 0% (TX, FL) to graduated brackets (CA, NY).
- FICA — a flat 6.2% Social Security (up to the wage base) plus 1.45% Medicare on all wages, with an extra 0.9% Medicare surtax for high earners.
Unlike income tax, FICA is calculated on your gross wages and is not reduced by pre-tax deductions. Your employer pays a matching FICA amount, so the total cost to employ you is roughly 7.65% higher than your gross.
Pre-Tax vs After-Tax Deductions
Pre-tax deductions lower your taxable income, which reduces federal, state, and FICA withholding. Common examples include traditional 401(k) contributions, health savings accounts (HSAs), and employer health insurance premiums.
After-tax deductions are taken from pay that has already been taxed. Roth 401(k) contributions are the most common example: they don't lower your current tax bill, but qualified withdrawals in retirement are tax-free. Use the "Pre-Tax Deductions" field for tax-reducing items and "Other Deductions" for after-tax items.
Overtime Laws by State
While the FLSA sets the federal baseline (1.5x after 40 hours/week), several states provide additional protection:
| State | Weekly OT | Daily OT | State Income Tax |
|---|---|---|---|
| California | 1.5x > 40 hrs | 1.5x > 8h, 2x > 12h | 1%–13.3% |
| Texas | 1.5x > 40 hrs | None | 0% |
| Florida | 1.5x > 40 hrs | None | 0% |
| New York | 1.5x > 40 hrs | None (Hospitality: 1.5x > 10h/day) | 4%–10.9% |
| Illinois | 1.5x > 40 hrs | None | 3.75%–4.95% |