How to calculate overtime pay

The basic formula is short: overtime pay = overtime hours × hourly rate × the overtime multiplier, and the most common multiplier is 1.5 — “time and a half.” If you earn $20 an hour and work 44 hours in a week where overtime starts after 40, you get 40 × $20 plus 4 × $30: $920 instead of $880. The hard part is never the multiplication. It is knowing which hours count as overtime, because that depends on rules that vary by country, by state, and by employer.

Weekly overtime: the common baseline

In the United States, federal law (the FLSA) sets the floor most people know: non-exempt employees earn at least 1.5× their regular rate for hours worked beyond 40 in a workweek. Many other countries have a weekly threshold too, though the number of hours and the multiplier differ. Two details trip people up:

• The week has a defined start. Overtime is counted inside a fixed, recurring seven-day window — not any rolling seven days. If your employer’s week runs Sunday to Saturday, a long stretch that straddles two weeks may produce no overtime at all.
• The “regular rate” can be more than your base wage. In the U.S., non-discretionary bonuses and shift differentials generally have to be folded into the rate before the 1.5× is applied. This is one of the most commonly underpaid details on real paychecks.

Daily overtime: fewer places, more math

Some jurisdictions add a daily threshold. California is the well-known example: over 8 hours in a day pays 1.5×, and over 12 pays 2×, regardless of the weekly total. Alaska and Nevada have daily rules as well, and plenty of union contracts and individual employers use daily overtime even where the law does not require it. When daily and weekly rules both exist, an hour that qualifies under both is not paid twice — there’s an ordering rule, and in the strictest places you get whichever calculation pays more.

Multiple tiers, and premiums that overlap

Real pay agreements often stack more than one step: 1.5× after 8 hours, 2× after 12; a higher rate on the seventh consecutive day; holiday pay on top of it all. The genuinely confusing cases are the overlaps — say a holiday shift that also runs into daily overtime. Does the holiday premium replace the overtime premium, add to it, or multiply through it? There is no universal answer: it depends on your contract or employer policy, which is exactly why you want the rule written down once and applied consistently, rather than re-derived at midnight on a calculator.

Tracking it automatically in Valio

Valio is a work hour tracker built around exactly this problem: you describe the rules your job actually pays, and it applies them to every shift you record.

• Daily and weekly overtime, with as many tiers as you need — 1.5× after 8 and 2× after 12 is two rows, not a spreadsheet.
• Rates in any form: a multiplier, a fixed hourly amount, a flat bonus, or a percentage.
• Overlap rules you choose: when two premiums cover the same hour — like daily overtime on a holiday — you decide whether Valio adds the premiums, multiplies them through, ranks one above the rest, or pins a flat rate.
• Starting points for your region and trade, ready to adjust to your actual agreement.
• The math is shown, not hidden. Tap any day and Valio tells you which rule applied to which minutes, and why — so when a paycheck looks wrong, you can point at the exact hours in question.

Clock in with one tap (or log the shift afterwards), and the day’s pay — regular, overtime, and every premium — is computed as you work. Shifts that cross midnight or a daylight-saving change are counted as real elapsed time.

Overtime law varies by place and by contract, and this guide is general information, not legal advice. Valio applies the rates and rules you enter; check anything you rely on in a dispute against your own agreement and local rules.