How to calculate time and a half: A complete guide

For most businesses in the US, calculating time and a half isn’t just important, it’s a legal requirement. Determining the correct overtime pay doesn’t have to be complicated, and doing it right keeps your organization compliant with labor regulations, fosters employee satisfaction, and keeps your payroll running smoothly. Miscalculating overtime pay can result in costly penalties and damage employee trust and morale.

This guide breaks down the process step by step. You’ll discover how time and a half works, who qualifies, and how to calculate overtime for hourly and salaried employees. By following our practical examples, you’ll be able to handle overtime calculations confidently, ensuring compliance and a motivated team.

What is time and a half?

Time and a half refers to paying employees 1.5 times their regular hourly rate for working overtime. Under the Fair Labor Standards Act (FLSA), organizations must pay this rate to non-exempt employees who work more than 40 hours in a workweek. While employers can legally require overtime work, this federal labor law obliges companies to pay an increased rate of pay. The requirement applies to full-time and part-time workers, ensuring fair compensation regardless of extra hours worked. While federal law only requires time and a half for overtime, some businesses offer higher rates like double time to incentivize additional work.

How does time and a half work?

Time and a half is typically used for overtime compensation. For example, if an employee’s hourly rate is $30, their time and a half rate would be $45 per hour. The FLSA requires employers to pay non-exempt employees time and a half for hours in excess of 40 hours in a workweek. The FLSA defines a workweek as any fixed 168-hour period that you designate. Employers cannot average hours between weeks. For example, an employee working 55 hours in one week and 25 hours in the next week is entitled to overtime pay for the first week (in this case, 15 hours). The FLSA applies regardless of whether the overtime was pre-approved or voluntary.

Time and a half isn’t limited to just overtime. Some employers choose to offer time and a half pay for work performed under specific conditions, including:

• Federal holidays
• Shifts exceeding 8 hours
• Weekend shifts
• Emergency call-ins
• Night shift differentials

In addition to federal regulations, some state employment and labor laws mandate time and a half pay for employees who work on holidays or shifts that go beyond 8 hours in one day.

Some time and a half obligations only apply to employees who are categorized as non-exempt. Exempt employees are typically in salaried executive or administrative roles and are not entitled to overtime. We’ll expand on this point in the next part of the guide.

The FLSA does not limit the number of hours employees aged 16 and older may work in any workweek. However, the FLSA does not require time and a half pay for work on Saturdays, Sundays, holidays, or regular days of rest unless overtime is worked on those days.

Who qualifies for time and a half

Under the FLSA, non-exempt employees who work over 40 hours in a workweek, defined as a fixed 168-hour period (see above), are entitled to an overtime pay rate of 1.5 times their hourly wage. To qualify as non-exempt, employees typically earn less than the FLSA threshold, which, as of January 1, 2025, is $1,128 per week or $58,656 annually. 

Time and a half is common in service-oriented industries, especially those with shift work. Many retail workers and those working in warehouses and distribution roles frequently earn overtime during busy seasons and holidays. Healthcare workers, especially nurses, can earn significant annual overtime pay.

In the hospitality sector, employees at hotels, resorts, restaurants, and drinking establishments generally receive overtime pay, especially during high seasons and festive periods. 

There are a number of industries and positions that are exempt from federal overtime regulations, including:

• Executive, administrative, and professional employees
• Teachers and academic administrative personnel
• Outside sales and certain commissioned employees of retail or service establishments
• Seasonal amusement or recreational employees
• Farmworkers and people in fishing operations
• Babysitters
• Domestic service workers living in the employer’s residence
• Persons employed as companions for the elderly or infirm
• Railway and air transport employees
• Taxi drivers
• Some motor carriers
• Some broadcasting employees 

Exempt status does not apply to all employees in the above jobs and industries. Consult the FLSA website for details and guidelines regarding specific exempt employees.

How is time and a half calculated for hourly employees?

As explained above, under the Fair Labor Standards Act, employers are required to pay non-exempt employees 1.5 times their regular hourly rate for hours worked beyond 40 in a single workweek. Here’s how you calculate time and a half for hourly workers:

• Step 1: Determine the employee's regular hourly rate. This is the standard wage rate that the employee earns during regular working hours. 
• Step 2: Multiply the regular hourly rate by 1.5 to get the time and a half rate. This calculation gives you the overtime pay rate.
• Step 3: Calculate the total overtime hours worked. Count all hours worked beyond 40 in a single workweek.
• Step 4: Multiply the time and a half rate by the total overtime hours. This gives you the total overtime pay earned.
• Step 5: Add the overtime pay to the regular wages to get the total earnings.

When calculating time and a half, you must include non-discretionary bonuses and commissions in the regular rate of pay. The overtime rate should be based on this total compensation, not just the base hourly wage. Organizations must track overtime hours accurately and maintain proper payroll records to comply with FLSA regulations. 

How to calculate time and a half for salaried employees

Many salaried employees are exempt from overtime wages. However, non-exempt salaried workers are still entitled to time and a half compensation for overtime hours. To calculate time and a half for salaried employees, follow these steps:

• Step 1: Determine the employee’s annual salary before deductions.
• Step 2: Divide the annual salary by the number of workweeks in a year (typically 52) to get the employee’s weekly rate. 
• Step 3: Divide the weekly salary by the regular number of hours worked per week (e.g., 40 hours) to get the regular hourly rate. This assumes a standard full-time workweek unless otherwise agreed. 
• Step 4: Multiply the regular hourly rate by 1.5 to calculate the time and a half rate.
• Step 5: Multiply the time and a half rate by the overtime hours worked.
• Step 6: Add the overtime pay to the regular earnings. This will give you the total gross compensation.

When making these calculations, ensure that you take into consideration employee agreements covering salaried work hours, state regulations, and non-discretionary bonuses or additional compensation that affects the pay rate. Always verify compliance with federal and local employment laws.

3 time and a half calculation examples

Understanding how to calculate overtime in everyday situations is essential for processing payroll accurately. Here are some practical examples for hourly and salaried employees to demonstrate how time and a half is determined.

Hourly employee time and a half example

In this scenario, Mary is a non-exempt hourly employee. She earns $20 per hour and worked 45 hours in the current workweek, 5 hours above the overtime threshold. This is how we would calculate Mary’s pay:

• Regular pay: 40 hours x $20 = $800
• Overtime rate: $20 x 1.5 = $30 per hour
• Overtime pay: 5 hours x $30 = $150
• Total weekly earnings: $800 + $150 = $950

In the above example, Mary’s gross pay for the workweek is $950. 

Salaried employee time and a half example

In this scenario, Marco is a salaried non-exempt employee. He earns $52,000 per year. This week, he worked 45 hours, 5 hours above the overtime threshold. Here’s how we calculate Marco’s earnings:

• Annual salary: $52,000
• Weekly salary: $52,000 ÷ 52 = $1,000
• Regular hourly rate: $1,000 ÷ 40 = $25 per hour.
• Overtime rate: $25 x 1.5 = $37.50 per hour
• Overtime pay: 5 hours x $37.50 = $187.50
• Total Weekly Earnings: $1,000 + $187.50 = $1,187.50

In the above example, Marco’s gross pay for the week is $1,187.50.

Salaried employee with nondiscretionary bonus example

In this example, Maya is a salaried, non-exempt employee who receives nondiscretionary bonuses. She earns $75,000 per year. This week, she worked 52 hours (12 hours over the threshold) and received a $100 performance bonus, a nondiscretionary bonus that must be included in overtime calculations. Here’s how we calculate Maya’s earnings: 

• Annual salary: $75,000
• Weekly salary: $75,000 ÷ 52 = $1,442.31
• Base compensation for the week: $1,442.31 + $100 bonus = $1,542.31
• Regular hourly rate (total compensation divided by standard hours): $1,542.31 ÷ 40 = $38.56
• Overtime rate: $38.56 × 1.5 = $57.84
• Overtime pay: 12 hours × $57.84 = $694.08
• Total Weekly Earnings: $1,542.31 + $694.08 = $2,236.39

In this example, Maya’s gross pay for the week is $2,236.39.

Seamlessly manage overtime pay with Rippling

Managing mandatory overtime can be complex and time-consuming, but Rippling's workforce planning features can help streamline the process and ensure compliance with legal requirements.

Rippling is a comprehensive HR and payroll platform that offers a range of tools to help employers effectively manage their workforce, including overtime tracking, scheduling, and reporting.

With Rippling, employers can:

• Automatically track employee hours and calculate overtime pay based on custom rules and thresholds
• Generate real-time reports on overtime usage, costs, and trends to inform staffing decisions
• Set up alerts and notifications to proactively manage overtime hours and avoid excessive costs
• Ensure compliance with state and federal overtime laws, applying the correct overtime requirements based on where employees live and work
• Schedule shifts and assign overtime based on employee preferences and qualifications
• Integrate with time and attendance systems to accurately capture and report on all hours worked

Rippling's scheduling tool also alerts managers when hourly workers are approaching overtime thresholds, so that they can make informed decisions about staffing and resource allocation.

By integrating all of these functions into a single platform, Rippling helps employers streamline their processes, reduce administrative burdens, and focus on strategic initiatives that drive business growth and employee engagement.

FAQs on how to calculate time and a half

What is time and a half for $15.00 an hour?

The calculation for a non-exempt hourly employee making $15 per hour is: $15 x 1.5 = $22.50 per hour. 

What is the formula for time and a half?

To calculate time and a half for an hourly non-exempt employee, multiply their hourly rate by 1.5. Next, multiply the number of overtime hours by the overtime rate. Add the result to the employee’s regular pay for the total weekly gross pay. 

To calculate time and a half for a salaried non-exempt employee, you must first figure out their hourly and overtime rates using the formula in this example::

• Annual salary: $66,000
• Weekly salary: $66,000 ÷ 52 = $1,269.23
• Regular hourly rate: $1,269.23 ÷ 40 = $31.73 per hour.
• Overtime rate: $31.73 x 1.5 = $47.60 per hour

Now multiply the number of overtime hours by $47.60 to get the amount of overtime. Add that to the regular hourly rate to get the employee’s total gross weekly earnings.  

What is time and a half of $18?

The calculation for a non-exempt hourly employee making $18 per hour is: $18 x 1.5 = $27 per hour.

This blog is based on information available to Rippling as of February 1, 2025.

Disclaimer: Rippling and its affiliates do not provide tax, accounting, or legal advice. This material has been prepared for informational purposes only, and is not intended to provide or be relied on for tax, accounting, or legal advice. You should consult your own tax, accounting, and legal advisors before engaging in any related activities or transactions.