FLSA Overtime Rules 2026: 1.5x and 2x Pay Explained
Everything US workers need to know about overtime pay rights, rates, and exemptions under the Fair Labor Standards Act.
The Federal Overtime Rule: 1.5x After 40 Hours
The FLSA's core overtime rule is straightforward:
Non-exempt employees must be paid at 1.5 times their regular rate of pay for all hours worked over 40 in a workweek.
A "workweek" is defined by the DOL as any 7-day period an employer chooses (e.g., Sunday through Saturday or Monday through Sunday). The key point is that overtime is calculated on a weekly basis, not a daily basis at the federal level.
How to Calculate Overtime Pay
Here's the basic formula for a $25/hr worker who puts in 45 hours in a week:
| Pay Component | Hours | Rate | Amount |
|---|---|---|---|
| Regular Pay (first 40 hrs) | 40 | $25.00 | $1,000.00 |
| Overtime Pay (hours 41–45) | 5 | $37.50 (1.5×) | $187.50 |
| Total Weekly Pay | 45 | $1,187.50 |
The overtime premium is $12.50 per hour (the half-time portion), which means the worker earns an extra $62.50 for those 5 overtime hours.
State Overtime Rules: Where 2x Pay Exists
While the federal standard is 1.5x after 40 hours, several states go further. The most notable is California, which has both a daily overtime rule and a double-time rule:
California Overtime (Labor Code §510)
| Overtime Trigger | Rate |
|---|---|
| Over 8 hours in a workday | 1.5× for hours 9–12, 2× for hours over 12 |
| Over 40 hours in a workweek | 1.5× for hours over 40 |
| 7th consecutive day worked | 1.5× for first 8 hours, 2× for hours over 8 |
Other states with additional overtime rules include Alaska (over 8 hours/day), Nevada (over 8 hours/day), and a handful of others with specific thresholds. New York, Colorado, and Maryland have enacted or are phasing in 2x overtime for very long workdays.
Example: California Overtime Calculation
A $30/hr worker in California putting in 12 hours in a single day:
| Hours | Rate | Pay |
|---|---|---|
| First 8 hours | $30.00 | $240.00 |
| Hours 9–12 (4 hrs × 1.5×) | $45.00 | $180.00 |
| Hours 13+ (not applicable, only 12 worked) | $60.00 (2×) | $0.00 |
| Total Daily Pay | $420.00 |
Exempt vs. Non-Exempt Employees
Not all employees are entitled to overtime. The FLSA exempts certain categories of workers from overtime requirements. In 2026, the key exemption tests are:
Salary Threshold Test
To qualify for exempt status, a salaried employee must earn at least $684 per week ($35,568 annually). This threshold was last updated in 2020 and remains unchanged for 2026. Employees earning below this threshold are automatically non-exempt and eligible for overtime, regardless of their job duties.
Duties Test
Even if a salaried employee earns above $684/week, they must also satisfy one of three duties tests to be exempt:
- Executive exemption: Manages a department, has hiring/firing authority, and spends < 20% of time on non-exempt work
- Administrative exemption: Performs office work directly related to management or business operations, exercises discretion and independent judgment
- Professional exemption: Performs work requiring advanced knowledge (customarily acquired through prolonged education), or is a licensed professional (doctor, lawyer, accountant)
Common Exempt Positions (Salary ≥ $684/wk)
| Exempt Category | Typical Roles |
|---|---|
| Executive | Managers, directors, supervisors |
| Administrative | HR managers, finance managers, operations analysts |
| Professional | Doctors, lawyers, CPAs, engineers (licensed), teachers |
| Outside Sales | Employees making sales away from the employer's premises |
| Highly Compensated | Earn ≥ $107,432/year (2026); exempt if they perform office/non-manual work |
How to Calculate the Regular Rate of Pay
The regular rate isn't just your hourly wage. It includes most compensation:
- Hourly base wages
- Non-discretionary bonuses (production bonuses)
- Commissions
- Shift differentials
- Cost-of-living adjustments
It does not include: discretionary bonuses, gifts, certain profit-sharing plans, or employer contributions to benefits.
Regular Rate for Salaried Employees
For salaried non-exempt employees (below the $684/wk threshold), the regular rate is calculated by dividing the weekly salary by 40 (the legal maximum for overtime calculation):
Regular Rate = Weekly Salary ÷ 40
Example: A salaried employee earning $3,000/month ($173.08/day) with 5-day, 8-hour days:
Weekly salary = $3,000 ÷ 4.333 = $692.31. Regular rate = $692.31 ÷ 40 = $17.31/hr.
Impact of Overtime on Your Taxes
Overtime pay is treated the same as regular wages for tax purposes — it's all subject to federal, state, and FICA withholding. However, because overtime pushes some workers into higher tax brackets, they sometimes notice a smaller-than-expected take-home difference for overtime hours. This is perfectly normal and part of the progressive tax system.
Use our Overtime Pay Calculator to see exactly how much you'll take home for each overtime hour.
FAQ
1.5x pay for all hours over 40 in a workweek. Some states (CA, AK, NV) require overtime after 8 hours/day as well.
$684 per week ($35,568/year) in 2026. Salaried employees below this threshold are non-exempt and eligible for overtime.
Federal law doesn't require 2x. California requires 2x for hours over 12 in a workday or over 8 on the 7th consecutive day.
Includes hourly wages, non-discretionary bonuses, commissions, and shift differentials. For salaried non-exempt: weekly salary ÷ 40.
No. Independent contractors are not covered by the FLSA. Only W-2 employees are protected by federal overtime laws.
Last updated: July 20, 2026.