What is the federal overtime rule?

Under the Fair Labor Standards Act, non-exempt employees must be paid at least 1.5 times their regular rate of pay for every hour worked over 40 in a workweek. There’s no federal requirement for daily overtime, weekend pay or holiday pay.

Can my employer make me work overtime?

Generally yes, for adults under federal law — an employer can require overtime and can discipline you for refusing, as long as it pays overtime correctly. Some states, union contracts and specific jobs (like certain nursing roles) limit mandatory overtime.

Can I get comp time instead of overtime pay?

Not at a private company: non-exempt private-sector workers must be paid for overtime, not given time off later. Public-sector employers (state and local government) can offer comp time in some cases, at 1.5 hours per overtime hour.

Is there no tax on overtime now?

For tax years 2025 through 2028, eligible workers can deduct the extra “half” portion of overtime pay required by federal law — up to $12,500 a year ($25,000 for married couples filing jointly), phasing out at higher incomes. Overtime is still subject to Social Security and Medicare taxes, and state tax rules vary.

Does overtime include holidays and sick days?

Under federal law, only hours actually worked count toward the 40. Paid holidays, vacation and sick time usually don’t count, though some employers and union contracts count them anyway.

Overtime Rules Explained: Who Gets Time and a Half?

Most hourly workers in the US must get at least time and a half for hours over 40 in a week. Here’s who qualifies, how states add their own rules, how bonuses change your overtime rate, and how overtime is taxed.

Overtime rules decide when you earn more than your normal rate for working extra hours. In the US, the baseline is federal law — the Fair Labor Standards Act (FLSA) — and many states add stronger rules on top. When federal and state rules differ, you get whichever is better for you.

Explain it like I’m 5

Imagine your job is to work 40 hours a week, and you get $20 for each hour. If the boss asks you to stay longer, those extra hours are taking away your free time — playtime, family time, sleep.

So there’s a rule: for every hour past 40, the boss must pay you one and a half times your normal pay. $20 becomes $30. That’s fair pay for giving up extra time, and it also makes bosses think twice before asking for too many long weeks.

See your overtime pay for any week with the time and a half calculator.

The federal rule in one sentence

Non-exempt employees must get at least 1.5× their regular rate for every hour over 40 in a workweek.

A workweek is any fixed, repeating 7-day period (it doesn’t have to start on Monday).
Each workweek stands alone — your employer can’t average 50 hours one week with 30 the next.
Federal law doesn’t require extra pay for nights, weekends or holidays (though many employers pay it).

Exempt vs. non-exempt

You’re exempt (no overtime) only if you meet all three tests:

Salary basis — paid a fixed salary that doesn’t drop when you work fewer hours.
Salary level — at least the federal minimum for exempt jobs, which has been $684 a week ($35,568 a year) since 2020. Some states, like California, New York and Washington, set much higher thresholds.
Duties — your main job is executive, administrative or professional work as defined by the Department of Labor (plus some special categories like outside sales and certain computer jobs).

If you fail any test, you’re non-exempt and must get overtime — even if you’re salaried. Job titles don’t decide it; your actual pay and duties do.

States with daily overtime

A few states also count long days:

State	Daily overtime rule (simplified)
California	1.5× after 8 hours in a day; 2× after 12 hours. Extra rules on the 7th day in a row.
Alaska	1.5× after 8 hours in a day (for employers with 4+ employees).
Nevada	1.5× after 8 hours in a 24-hour period, for workers earning under 1.5× the state minimum wage.
Colorado	1.5× after 12 hours in a day or 12 hours in a row.

Rules have many exceptions — check your state labor department for details.

Your “regular rate” isn’t always your hourly wage

Overtime is based on your regular rate of pay, which must include most extra pay you’re promised:

Production, attendance or shift bonuses
Commissions
Shift differentials (e.g. extra for nights)

Example: you earn $20/hour, work 45 hours, and get a $90 production bonus. Your regular rate is ($900 + $90) ÷ 45 = $22/hour. You’re owed an extra half-rate of $11 for each of the 5 overtime hours = $55 on top of the $990 — $1,045 total, not $1,040.

Gifts, discretionary bonuses and expense reimbursements usually don’t count.

How overtime is taxed

Overtime is taxed as regular income. It can look like it’s taxed more on a big paycheck because withholding assumes you earn that much every period; any extra is refunded when you file.
New overtime deduction (2025–2028): you can deduct the “half” part of FLSA-required time-and-a-half pay — up to $12,500 a year, or $25,000 for married couples filing jointly. It phases out for incomes above $150,000 ($300,000 joint). It reduces federal income tax only, not Social Security, Medicare or (usually) state tax.

If you think you’re owed overtime

Keep your own record of the hours you work.
Ask payroll or HR to explain your classification and pay.
Contact the US Department of Labor’s Wage and Hour Division or your state labor department — filing a complaint is free, and retaliating against you for it is illegal.

This article is for general education and is not financial, investment or tax advice. Rates, rules and limits change; check current terms with your bank or the IRS. See our disclaimer.