Overtime pay 2026: the 40-hour rule, explained

When does an hour become overtime?

Under the Fair Labor Standards Act, a covered non-exempt employee must be paid overtime for hours worked over 40 in a workweek, at a rate not less than time and one-half their regular rate of pay. There is no federal threshold below 40, and no federal limit on how many hours an employee aged 16 or older may work in a week. The rule is set out in the Department of Labor's Fact Sheet #23.

Beware: only hours actually worked count. An unpaid meal break or a day of leave does not create overtime. That is why reliable time tracking and an accurate hour count matter before you ever get to pay rates.

Your workweek is whatever you fix it to be

The Act applies on a workweek basis. A workweek is a fixed and regularly recurring period of 168 hours, seven consecutive 24-hour periods. It does not have to match the calendar week: it can start on any day, at any hour, and different groups of employees can have different workweeks.

Two consequences that catch people out:

• You cannot average hours across two or more weeks. 30 hours one week and 50 the next is not two 40-hour weeks; it is 10 overtime hours in the second week.
• Overtime earned in a workweek is normally paid on the regular payday for the pay period in which it was earned.

Weekends and holidays are not automatically overtime

The FLSA does not require extra pay for work on Saturdays, Sundays, holidays or regular days of rest, unless overtime hours are actually worked on those days. Premium pay for a Sunday shift can exist, but it comes from your own policy or an agreement, not from federal law.

States can add rules of their own, including daily thresholds and scheduling requirements. If you operate in a city or state with predictive scheduling rules, see fair workweek laws.

A concrete example

Take an employee whose regular rate is $18 an hour and who works 46 hours in a busy week:

• The first 40 hours: paid at the regular rate.
• The 6 hours above 40: paid at not less than 1.5 times the regular rate, so at least $27 an hour here.
• That is $720 plus $162, at least $882 for the week, before any state rule that goes further.

Test your own week with our free overtime calculator.

The most common errors

• Counting overtime on hours on site instead of hours actually worked, with an unpaid break wrongly included.
• Averaging two weeks to avoid the 40-hour line, which the Act does not permit.
• Assuming a Sunday or a holiday is automatically paid at a premium.
• Using the calendar week when the business runs on a different fixed workweek.

These pitfalls join our 5 mistakes in time management and the 7 labor law scheduling rules.

Automate to stop getting it wrong

Calculating overtime becomes trivial when the schedule and time tracking are linked: the tool knows your workweek, counts hours actually worked and flags the moment someone crosses 40. Squadra Planning calculates all of this continuously. See our pricing and the complete working time guide.

In summary

Over 40 hours in a fixed workweek, at least time and one-half, no averaging between weeks, and no automatic premium for weekends. Nothing mysterious, as long as you start from hours that are actually measured and a tool that applies the rule for you.

The most common way a week crosses 40 without anyone deciding to is a shift trade between two employees: the trade looks even across the pair while landing unevenly on each of them. See shift swapping.

One question always follows: can you give the time back instead of paying it? For a private employer the answer is no, and the reason is worth knowing: banked hours and comp time.