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GuideTax

How to Calculate Overtime Pay Correctly

Splits total hours into normal and overtime at the threshold you set, then pays the overtime portion at your multiplier — 1.5× (\"time and a half\") is the…

Editorial illustration representing the Overtime Pay workflow.
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Overtime disputes are almost always arithmetic disputes. Both sides agree on the hours; they disagree on which hours counted as overtime and what multiplier applied to them.

What the Overtime Pay does

Splits total hours into normal and overtime at the threshold you set, then pays the overtime portion at your multiplier — 1.5× ("time and a half") is the common statutory rate.

Defaults to a 40-hour normal week, which is the usual threshold, and a base rate of 22 per hour.

Open the Overtime Pay and follow the settings and checks below.

Inputs and defaults

Setting What it means
Base hourly rate Default 22
Normal hours Default 40 a week
Overtime multiplier 1.5 = time and a half; 2 = double time
Overtime hours Anything above the normal threshold
Returns Normal pay, overtime pay, total
Knows your labour law? No
Excludes Tax, deductions, unsocial-hours premiums
Salaried staff May be exempt — depends on jurisdiction

How to use it

  1. Enter your base hourly rate.
  2. Set the normal-hours threshold — 40 in many places, but check yours.
  3. Enter total hours worked and the multiplier.

Practical advice

Check whether your overtime threshold is weekly or daily, because it changes the answer completely. Some jurisdictions pay overtime after 8 hours in a single day regardless of the weekly total — so four 10-hour days is 8 hours of overtime there and none at all under a 40-hour weekly rule.

Common questions

What multiplier should I use?

1.5 — time and a half — is the most common statutory minimum, with 2× for some holidays or extended hours. Your contract or local law decides, and both can be more generous than the minimum.

Is the threshold daily or weekly?

It depends where you are, and it materially changes the result. Weekly thresholds are commonest, but several jurisdictions use a daily one, and some use both with whichever gives more overtime.

Am I entitled to overtime at all?

That depends on your jurisdiction and classification — many places exempt certain salaried and managerial roles. This calculates the pay for hours you are entitled to; it cannot tell you whether you are entitled.

Is this before or after tax?

Before. It is gross pay. Overtime is usually taxed the same as normal pay, though a large one-off can push a period into a higher withholding bracket even when the annual position is unchanged.

Useful next tools

Vootkit provides general educational calculations, not tax, accounting, legal or payroll advice. Rates, thresholds, allowances and filing rules vary by country and can change. Verify current figures with the relevant tax authority or a qualified professional.

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