Overtime Pay FAQ
25 questions about FLSA overtime, state rules, and the 2025 no-tax proposal.
What is overtime pay?
Compensation for hours over 40/week at 1.5x the regular rate under FLSA.
How is overtime calculated?
OT Rate = Hourly Rate x 1.5. OT Pay = OT Rate x OT Hours. Example: $20/hr x 1.5 = $30 OT rate x 5 hrs = $150.
What is the FLSA?
The Fair Labor Standards Act — the federal law governing minimum wage, overtime, and recordkeeping for US employees.
Who qualifies for overtime?
Non-exempt employees working over 40 hrs/week. Most hourly workers qualify. Salaried employees below $684/week also qualify.
What is the FLSA salary threshold for OT exemption?
As of 2025, the threshold is $684/week ($35,568/year). Below this, employees receive OT regardless of job duties.
What is the 2025 no-tax-on-overtime proposal?
A federal proposal to exempt overtime pay from federal income tax. Still in Congress as of 2026. Our calculator lets you toggle it to see potential savings.
Does California have different overtime rules?
Yes. CA requires 1.5x after 8 hrs/day or 40 hrs/week, and double-time after 12 hrs/day or 8 hrs on the 7th consecutive day.
Does Alaska have daily overtime?
Yes. AK requires OT after 8 hrs/day OR 40 hrs/week, whichever triggers first.
Does Nevada have daily overtime?
Yes — but only for employees earning less than 1.5x the state minimum wage.
Does Colorado have daily overtime?
Yes. CO requires OT after 12 hrs/day or 40 hrs/week, whichever triggers first.
Are salaried employees eligible for overtime?
Yes if earning below $684/week. Above that, the duties test (executive, admin, professional exemption) determines eligibility.
Does overtime affect FICA taxes?
Yes. OT is subject to Social Security (6.2%) and Medicare (1.45%) taxes. The no-tax proposal only covers federal income tax, not FICA.
Can employers give comp time instead of OT?
Only public-sector employers. Private employers must pay OT in cash — comp time in lieu of OT violates FLSA.
Is there a cap on how many OT hours I can work?
No federal cap for most adults. Some states and industries (healthcare, trucking) have separate maximum-hours rules.
What is the regular rate of pay for OT purposes?
Base wage plus non-discretionary bonuses and shift differentials. Excludes vacation pay, gifts, and discretionary bonuses.
Can I waive my right to overtime?
No. FLSA OT rights cannot be waived. Any agreement to forego OT is unenforceable.
How long can I go back to claim unpaid OT?
2 years under FLSA (3 years for willful violations). California allows 3 years.
How do tips affect overtime?
OT must be calculated on the full minimum wage rate, not the tipped cash wage of $2.13/hr.
Do non-discretionary bonuses affect my OT rate?
Yes. Performance and attendance bonuses must be included in the regular rate for OT calculation purposes.
What if my employer misclassifies me as exempt?
File with the DOL Wage and Hour Division or sue in federal court. Employers owe back OT plus equal liquidated damages plus attorney fees.
How is OT calculated for piece-rate workers?
Regular rate = total weekly earnings / total hours. OT premium = (regular rate x 0.5) x overtime hours.
Does the no-tax proposal cover state income taxes?
No. State income taxes would still apply unless individual states pass parallel legislation.
Are independent contractors entitled to overtime?
No. Independent contractors are not FLSA-covered. Misclassifying employees as contractors to avoid OT is illegal.
Does OT show up separately on my W-2?
No. All OT pay is included in Box 1 wages. There is no separate OT line on a standard W-2.
Is this calculator accurate?
Yes — uses the standard FLSA 1.5x formula with California/Colorado/Alaska/Nevada daily OT rules. The no-tax estimate uses the 22% supplemental federal withholding rate.