Overtime Cost Estimator

Enter the hourly wage, regular hours, and overtime hours to instantly see total payroll cost, overtime premium, and the true extra expense overtime adds to your business.

Employee & Hours Details

Employee Hourly Wage ? The employee's regular base pay per hour before any overtime multiplier is applied.

Regular Hours Worked ? Standard hours worked in the pay period before overtime kicks in. Typically 40 hours per week under US federal law (FLSA).

Overtime Hours Worked ? Hours worked beyond the regular threshold that qualify for overtime pay under FLSA or your state's laws.

Overtime Rate Multiplier ? 1.5× (time-and-a-half) is the US federal standard for most employees. 2× (double-time) is required in some states like California for hours over 12/day.

Payroll Cost Breakdown

Total Payroll Cost

—

regular + overtime

Overtime Pay

—

overtime hours × OT rate

Additional OT Cost

—

overtime premium only

Regular Pay

—

standard hours

OT Hourly Rate

—

per overtime hour

Pay Breakdown

Regular Pay

Base OT Cost

OT Premium

Understanding Overtime Costs

How Overtime Is Calculated

Under the US Fair Labor Standards Act (FLSA), eligible employees must receive at least 1.5× their regular rate for all hours over 40 in a workweek. Some states require overtime for daily hours over 8 as well.

OT Pay = OT Hours × (Wage × 1.5)

The True Cost of Overtime

Overtime doesn't just cost 50% more per hour — it also inflates payroll taxes (FICA) proportionally. An employee earning $20/hr costs $30/hr in overtime wages alone, before employer taxes on top of that.

Total OT Cost = OT Pay + FICA on OT Pay

When Is Double-Time Required?

California requires double-time (2×) for hours over 12 in a single workday and for all hours on the 7th consecutive workday. Some union contracts and industries also mandate double-time. Always check your state's specific rules.

Double-Time = Wage × 2.0

The Overtime Premium Explained

The "additional overtime cost" is the premium you pay above what you'd pay if those same hours were at regular rates. It's the true extra expense — the cost of working those hours in overtime rather than regular time.

Premium = OT Hours × Wage × (Multiplier − 1)

Business Examples

Retail

Store Associate — Holiday Season

$15/hr · 40 regular hrs · 15 overtime hrs · 1.5× multiplier

Total cost: $937.50

Restaurant

Line Cook — Busy Weekend

$18/hr · 40 regular hrs · 8 overtime hrs · 1.5× multiplier

Total cost: $936.00

Construction

Skilled Tradesperson

$35/hr · 40 regular hrs · 12 overtime hrs · 1.5× multiplier

Total cost: $2,030.00

California

Warehouse Worker — Long Shift

$22/hr · 40 regular hrs · 5 overtime hrs · 2.0× (double-time)

Total cost: $1,100.00

How to manage overtime costs without burning out your team

Track overtime weekly, not monthly. FLSA overtime is calculated per workweek. By the time you see high monthly overtime, the cost is already locked in. Weekly tracking lets you intervene before it escalates.
Compare hiring vs overtime cost. When overtime becomes chronic, a part-time hire or contractor may be cheaper than ongoing premium wages. Run the numbers — the breakeven point is often lower than managers expect.
Stagger shifts to avoid the 40-hour threshold. Scheduling 4 × 10-hour shifts instead of 5 × 8-hour shifts gives employees more flexibility while keeping all hours within the regular rate. Consult your state's daily overtime rules first.
Exempt vs non-exempt matters a lot. Salaried employees classified as exempt from FLSA overtime are not entitled to overtime pay regardless of hours worked — but misclassification carries significant legal and financial risk. Always verify classification with an employment attorney.
Factor FICA into overtime planning. Employer payroll taxes (7.65%) apply to all wages including overtime. A $300 overtime bill actually costs closer to $323 when you include employer FICA. This calculator shows the wage cost — add 7.65% for the complete picture.

Frequently Asked Questions

Under the FLSA, most hourly (non-exempt) employees are entitled to overtime at 1.5× their regular rate for hours over 40 per workweek. Salaried employees earning below the FLSA threshold ($684/week as of 2024) are also typically entitled to overtime. Exempt employees — certain executive, administrative, professional, and outside sales roles above the salary threshold — are not. State laws may add additional protections.

Under federal FLSA, overtime is calculated on a weekly basis — hours over 40 in a single 7-day workweek. However, several states (including California, Nevada, and Alaska) also require daily overtime for hours over 8 in a single workday. Always apply whichever calculation results in greater pay for the employee.

Private sector employers generally cannot substitute comp time for overtime pay under FLSA — you must pay the cash premium. Government and public sector employers have more flexibility to offer comp time. Some states have their own rules. Offering comp time in lieu of overtime wages to private sector non-exempt employees is a common and costly compliance mistake.

A rough rule: if overtime consistently exceeds 8–10 hours per employee per week for 3+ months, compare the annualised overtime cost against the loaded cost of a part-time hire (including payroll taxes and benefits). Part-time employees often become cheaper once overtime hours are above 10–15 hours per week — especially for roles where the overtime hours are predictable and recurring.

No — this calculator shows the gross wage cost only. Employers also pay FICA (7.65%) on all wages including overtime. To estimate total employer cost, multiply the total payroll figure by 1.0765. For full accuracy, also factor in state unemployment taxes (SUTA) and workers' compensation premiums.