How to Calculate Overtime Pay: US & India Laws

By Nishikant Xalxo | Salary Calculation Expert | Updated: January 10, 2025 | 11 min read

Overtime pay calculation seems simple—1.5x rate—but state laws, exemptions, and daily/weekly thresholds make it complex. I've built salary calculators for both US and Indian payroll systems. Here's the breakdown.

United States Overtime Laws (FLSA)

Federal Standard (Most States)

40 hours/week: Overtime threshold
1.5x rate: Time-and-a-half for hours over 40
No daily OT: Can work 12 hours in a day with no OT (unless state says otherwise)
Exempt employees: Salaried managers, professionals don't get OT

Federal OT Calculation Example:

Rate: $20/hour
Hours worked: 48 hours
Regular pay: 40 × $20 = $800
OT pay: 8 × ($20 × 1.5) = $240
Total: $800 + $240 = $1,040

State Variations

State	Daily OT Threshold	Special Rules
California	8 hours	Double time after 12 hours
Alaska	8 hours	1.5x after 8h, 2x after 12h
Nevada	8 hours (if < $12/hr)	Applies to lower-wage workers only
Colorado	12 hours	1.5x after 12h, after 40h/week
Texas/Florida	None	Follow federal 40h/week only

California Example (Most Complex):

Rate: $25/hour, Hours: 14 hours

First 8 hours: 8 × $25 = $200
Hours 8-12: 4 × ($25 × 1.5) = $150
Hours 12-14: 2 × ($25 × 2) = $100
Total: $200 + $150 + $100 = $450 (for 14-hour day)

India Overtime Laws (Factories Act, 1948)

Indian overtime law is simpler but has daily and weekly components:

9 hours/day: Maximum normal working hours
48 hours/week: Maximum normal weekly hours
2x rate: Double wages for overtime hours
12 hours/day max: Including OT (factory workers)

India OT Calculation:

Rate: ₹500/day (8 hours = ₹62.5/hour)
Hours worked: 10 hours

Normal: 8 hours = ₹500
OT: 2 hours × ₹125/hour (double rate) = ₹250
Total: ₹500 + ₹250 = ₹750

Common Employer Violations

1. Misclassifying employees as exempt: Calling workers "managers" to avoid OT pay. Must meet salary AND duties tests.

2. Averaging hours across weeks: Cannot average 35h + 45h weeks to avoid OT. OT calculated weekly.

3. Not paying OT on bonuses: OT rate must include shift differentials and non-discretionary bonuses.

4. Illegal in India: Not paying double rate or forcing >12h days without compensation.

Calculating OT with Shift Differentials

If you earn night shift premium, OT rate must include it:

Example:

Base rate: $20/hour
Night premium: +$3/hour
Effective rate: $23/hour
OT rate: $23 × 1.5 = $34.50/hour

10 OT hours: 10 × $34.50 = $345 OT pay

Using Our Calculator

Our Hourly Salary Calculator handles:

US federal and state OT rules
India double-time calculations
Shift differentials and bonuses
Weekly and daily OT thresholds

Try it now → shader7.com/hourlysalarycalculator/

About the Author: Nishikant Xalxo built salary calculators for both US and Indian payroll systems after working in manufacturing facilities in both countries. Contact: nxdecore@gmail.com

Next: Read Hourly vs Salary Comparison