Overtime, explained: how it's counted, how it's paid, and how to check it's right

1. What counts as overtime

Overtime is any time worked beyond the hours that count as a normal working day or week. Two things decide it:

• The limit. How many hours count as normal before overtime starts. A common pattern is 8 hours a day or 40 to 48 hours a week, but the number depends on the law, the job and the contract.
• The period. Whether those hours are counted per day, per week, or over the whole pay period. This sounds like a detail. It's the single biggest reason two people can work the same hours and be paid different amounts.

The international benchmark here is the International Labour Organization's Hours of Work Convention, which set the 8-hour day and the 48-hour week, and says overtime should be paid at no less than one and a quarter times the normal rate. Many countries go further. Some pay one and a half times from the first overtime hour. Others add a second, higher band.

2. The limit: per day, per week, or per pay period

There are three common ways to count, and they give different answers.

Per day. Anything over the daily limit is overtime, even if the week ends up short. A 10-hour Monday with an 8-hour daily limit gives 2 overtime hours, even if the person only works three days that week.

Per week. Hours are added up over the working week, and only the hours over the weekly limit are overtime. Long days and short days cancel each other out within the week.

Per pay period. Hours are added up over the whole pay period (two weeks, half a month, a month), and only the hours over the period's limit are overtime.

Worked example: same hours, three answers

Maria is paid US$ 10.00 an hour. Her employer pays overtime at 1.5 times. She's paid every two weeks.

• Counted per week (over 40 a week): week 1 has 12 overtime hours, week 2 has none. 12 overtime hours. Pay: 70 normal hours × 10.00 = 700.00, plus 12 × 15.00 = 180.00. Total US$ 880.00.
• Counted per pay period (over 80 in two weeks): 82 − 80 = 2 overtime hours. Pay: 80 × 10.00 = 800.00, plus 2 × 15.00 = 30.00. Total US$ 830.00.
• Counted per day (over 8 a day): it depends on how her 52 hours were spread across the days. Five 10.4-hour days give 12 overtime hours in week 1. Seven days of about 7.4 hours give none.

Same 82 hours, a US$ 50 difference, just from the counting period. So the first question when checking overtime is never "how many hours?" It's "counted over what?"

Which day the week starts on matters too. If the week runs Sunday to Saturday, a long Sunday shift belongs to the new week. Move the start to Monday and the same shift lands in the previous week. Pick a start day, keep it, and make sure your payroll uses the same one.

3. The rate: time and a half, double time, and bands

Once you know how many overtime hours there are, the rate decides what they're worth.

• Time and a half (1.5×). The most common overtime rate. At US$ 10.00 an hour, each overtime hour pays US$ 15.00.
• Double time (2×). Often used for a second band of very long hours, for rest days, or for public holidays. Each hour pays US$ 20.00.
• Bands. Many employers use two steps: for example, hours over 44 in a week at 1.5×, and hours over 48 at 2×.

Worked example: two bands

Devon earns US$ 12.00 an hour. Overtime is paid at 1.5× over 44 hours a week, and 2× over 48. He works 52 hours.

A common mistake is to pay all 8 extra hours at double time, or all 8 at time and a half. The bands apply in order: the first 4 extra hours at 1.5×, only the hours past 48 at 2×.

"Premium" vs "full rate". Some payroll systems pay every hour at the normal rate and then add only the extra part for overtime: the 0.5 for time and a half, or the 1.0 for double. The total is the same. 52 × 12.00 = 624.00, plus a premium of 4 × 6.00 + 4 × 12.00 = 72.00, gives 696.00. But the payslip looks different. If you see a line called "overtime premium" that seems too small, check whether the hours themselves are already in the normal pay line.

4. Weekends and public holidays

Work on a rest day or a public holiday is often paid at a higher rate, and it's where most double-counting happens.

There are three common set-ups:

1. Premium on the day. Saturday, Sunday or holiday hours are paid at a higher rate (for example 1.5× on Sunday, 2× on a holiday) whether or not the week goes over the limit.
2. Counts towards overtime. Weekend hours are normal hours that simply count towards the weekly limit, and overtime is worked out on the total.
3. Both, but not twice. Weekend hours get their premium, and the overtime calculation then makes sure the same hour isn't paid at two premiums at once.

Worked example: a Sunday shift

Andre earns US$ 10.00 an hour. His employer pays Sundays at 1.5× and overtime at 1.5× over 40 hours a week. He works 40 hours Monday to Friday and 6 hours on Sunday.

• If Sunday is a premium day and doesn't also count as overtime: 40 × 10.00 = 400.00, plus 6 × 15.00 = 90.00. US$ 490.00.
• If Sunday counts towards the weekly total: 46 hours, 6 of them over 40, so 6 × 15.00. Also US$ 490.00.
• If both premiums are stacked (1.5 × 1.5 = 2.25×): 6 × 22.50 = 135.00. US$ 535.00.

Whether stacking is allowed depends on the law and the contract, so check. What matters on the payslip is that it's clear which rule was used. A good payslip shows "Sunday (1.5×), 6.00 h worked" as its own line, not hidden inside "Regular hours".

Public holidays you don't work are a separate question. In many places, staff are paid for a public holiday even when they're off, usually at their normal daily rate. That's holiday pay, not overtime.

5. Which minutes count: breaks, early starts, travel and call-outs

Overtime is only as accurate as the hours it's built on. These are the grey areas that cause the most arguments.

• Unpaid meal breaks don't count as working time, so they don't count towards overtime. But if someone works through a break, or is asked to stay at their post, it usually does count. "No lunch break today because of the delivery" should become paid time, not disappear.
• Short rest breaks of a few minutes are often treated as working time. Check your rules.
• Starting early. If someone clocks in at 5:40 for a 6:00 start, whether those 20 minutes count depends on your policy. Some employers count from the scheduled start unless the early start was asked for. Whatever the rule, apply it the same way to everyone and write it down.
• Rounding. Rounding clock times (to the nearest 5 or 15 minutes, say) is common. It should round both ways evenly, not always in the employer's favour. Recording to the minute avoids the question altogether.
• Travel between sites during the working day usually counts as work. The trip from home to the first site usually doesn't.
• Overnight shifts. A shift from 10 p.m. to 6 a.m. crosses midnight. Make sure all 8 hours land in the right day and week. Overnight shifts that get split at midnight are a classic source of missing overtime.
• Call-outs. Being called back in after going home is often paid with a minimum (for example "at least 2 hours"), or a fixed call-out fee. Check whether the call-out hours also count towards overtime.

6. Salaried staff and overtime

"I'm on a salary, so I don't get overtime" is sometimes true and sometimes not. In many places, some salaried roles (typically senior or managerial) are exempt from overtime, and others aren't. A fixed salary doesn't, on its own, cancel the right to overtime.

Where salaried staff are paid overtime, the hourly rate is usually worked out from the salary. For example, a weekly salary of US$ 600.00 for a 40-hour week is US$ 15.00 an hour, so time and a half is US$ 22.50.

Some employers pay salaried staff their salary plus overtime only, with no per-hour pay for normal hours. That's a perfectly valid set-up. The payslip should simply show the salary line and the overtime line separately.

7. Time off instead of pay

Some employers offer time off in lieu (TOIL) instead of overtime pay: an extra hour off for each overtime hour, or 1.5 hours off for each, matching the overtime rate. Where it's allowed, it should be agreed up front, recorded hour by hour, and taken within a reasonable time. Time off that's never actually taken is, in effect, unpaid overtime.

8. How to check overtime on a payslip

Whether you're an employee checking your own pay or a payroll officer checking a run, work through it in this order.

1. Find the period. What dates does the payslip cover, and is overtime counted per day, week or pay period?
2. Add up your hours. Use your own record (see the checklist below) or the hours on the payslip. Separate normal days from weekends and holidays.
3. Apply the limit. How many hours are over the limit for that period? Remember to count each week separately if overtime is weekly.
4. Apply the rate. Multiply the overtime hours by the right rate, band by band.
5. Compare with the payslip. Look for an overtime line (or an overtime premium line) and check the hours and the amount.
6. Check the extras. Weekend, holiday and call-out lines, and whether any hour seems to be paid twice or not at all.

If the numbers don't match, the difference is usually one of: the wrong counting period, a break counted wrongly, an overnight shift split across two days, or a weekend premium applied differently from what you expected.

9. If overtime hasn't been paid

Most overtime errors are honest mistakes, and most are fixed quickly once someone shows the numbers.

1. Check the maths first using the steps above, so you know exactly which hours and how much.
2. Raise it in writing, with the dates, the hours and the amount. Keep it simple and factual. For example: "My payslip for 1–14 October shows 2 overtime hours. My records show 52 hours in the week of 1 October, which is 12 hours over 40. Could you check this?"
3. Give payroll time to respond, and ask for any correction to appear on the next payslip.
4. If it isn't resolved, your labour department can explain your rights and how to make a claim. There are often time limits for claims, so don't wait months.

10. A checklist for employers

• The overtime limit and counting period (day, week, pay period) are written down and match the payroll settings.
• The week start day is fixed and used everywhere.
• Overtime bands and rates are set correctly (e.g. 1.5× then 2×).
• Weekend and public holiday rates are set, with a clear rule on whether they stack with overtime.
• Break rules are set: what's paid, what's unpaid, and what happens when someone works through a break.
• Overnight shifts land on the right day and in the right week.
• Rounding, if used, is even-handed.
• Salaried staff who are entitled to overtime are set up to receive it.
• Every payslip shows overtime as its own line, with hours and rate, not buried in normal pay.
• Time records are kept for as long as the law requires, with a record of any edits.

11. Frequently asked questions