New Jersey overtime pay calculator

The federal rule

Non-exempt employees are owed at least 1.5 times their regular rate for every hour above 40 in a single workweek. A workweek is a fixed, recurring period of 168 consecutive hours, seven consecutive 24-hour days, and it does not have to start on Monday or line up with the calendar week. What it cannot do is move around to suit a payroll department.

Hours cannot be averaged across two weeks to avoid the threshold. Fifty hours one week and thirty the next owes ten hours of overtime, even though the fortnight totals eighty. This holds for employees paid every two weeks or twice a month, where the pay period and the workweek are different things.

There is no federal limit on how many hours an adult may be asked to work, and no federal requirement to pay a premium for nights, weekends or holidays. Those are matters for a contract or a state law. The federal rule is about the 40-hour line and nothing else.

The rule attaches to the employee, not to the pay method. Hourly, salaried, piece rate, commission and day rate workers can all be non-exempt, and a non-exempt employee is owed the premium however their pay is structured. For a salaried non-exempt employee the regular rate is found by converting the salary to a weekly figure and dividing by the hours that salary was intended to cover, after which a premium is added for the hours beyond 40. Employers who assume that paying a salary settles the question are the ones who end up paying back wages, and the calculation above is what decides it.

The worked example, at the default inputs

The calculator opens on $25 an hour, 40 regular hours, 5 overtime hours, a 1.5 multiplier and no double-time hours.

The overtime hourly rate is $37.50, which the tool shows as its own line because it is the number to check against a payslip. Five hours of overtime added $187.50 to a $1,000 week, so the last five hours were worth 18.75% of the first forty.

Add four double-time hours, as a California employee working a 16-hour day might, and the tool adds $200 at $50 an hour, taking the week to $1,387.50. Set the multiplier to 2 instead and every premium hour is paid at double, which is what some union contracts and some state seventh-day rules require.

Over a year, five overtime hours a week is $9,750 on top of a $52,000 base, which is worth checking against the hourly to salary calculator if you are comparing an overtime-heavy job against a salaried one.

What counts as the regular rate?

More than the number on your contract, and this is where employers most often get it wrong.

The regular rate is total straight-time earnings for the week divided by total hours worked. It includes non-discretionary bonuses, shift differentials, commissions, production bonuses and attendance bonuses. It excludes genuine gifts, discretionary bonuses, paid leave, reimbursed expenses and premium pay already paid at time and a half.

Work an example. Someone paid $25 an hour works 45 hours and earns a $100 production bonus that week. Straight-time earnings are 45 x $25 plus $100, which is $1,225. Divide by 45 hours and the regular rate is $27.22, not $25. The overtime premium owed is half that rate for each of the five overtime hours, which is $68.06, so the week should pay $1,293.06 rather than the $1,187.50 the base rate alone suggests.

That $105 gap, repeated weekly, is roughly $5,500 a year. This calculator works on a single rate you enter, so if you receive non-discretionary bonuses, compute your blended regular rate first and enter that figure instead of your base rate.

States that go further

Where federal and state rules differ, the one more favourable to the employee applies.

• California requires overtime above 8 hours in a day, double time above 12, overtime for the first 8 hours of a seventh consecutive day in a workweek, and double time beyond that.
• Alaska, Nevada and Colorado have daily overtime rules of their own, with different thresholds and different conditions attached.
• Several states require a rest day or premium pay for a seventh consecutive day worked.
• A few states set a lower weekly threshold than 40 for particular industries.
• Most states have no daily rule at all and simply follow the federal weekly one.

The daily rules matter most for compressed schedules. Four ten-hour days is 40 hours, so no federal overtime is owed. In California the same schedule owes two hours of overtime a day at 1.5x, eight hours a week, unless a valid alternative workweek schedule has been adopted.

Who is exempt, and who only sounds exempt

Exemption depends on what the job actually involves and what it pays, not what it is called. The executive, administrative and professional exemptions each have a duties test and a salary threshold, and an employee must satisfy both.

Calling somebody a manager does not exempt them if their work is routine and they supervise nobody. Paying somebody a salary does not exempt them either: salary is a payment method, not a legal status, and a salaried employee who fails the duties test is non-exempt and owed overtime like anyone else.

If you are unsure, the duties test is the thing to look at, and the Department of Labor fact sheet linked below sets out what each one requires. A job title is not evidence.

Are you owed overtime you have not been paid?

Work through this before concluding anything either way.

• Confirm your employer's defined workweek and its start day
• Add up hours actually worked each week separately, without averaging across the pay period
• Exclude paid leave, holiday and sick hours from the total, because they are not hours worked
• Include time spent on required tasks before and after a shift
• Compute your blended regular rate if you receive non-discretionary bonuses
• Check your state for a daily overtime or seventh-day rule
• Compare the premium actually paid against 1.5 times that regular rate
• Keep your own record of hours, since the burden of proof is lighter when records exist

If the numbers do not reconcile, the Wage and Hour Division of the Department of Labor takes complaints and the state labour agency often has a faster process. Our paycheck guides explain how to read the underlying payslip.

The mistakes employers make most often

Averaging two weeks together. Not permitted. Each workweek stands alone.

Using the base rate instead of the regular rate. The single most common underpayment, and it compounds quietly over a year.

Counting paid time off toward the 40. Holiday, sick leave and paid time off are not hours worked, so a week with 8 hours of holiday and 36 hours worked is 44 hours paid but no overtime owed.

Offering time off in lieu. Private-sector employers generally cannot substitute compensatory time for overtime pay. Public agencies operate under a different rule.

Treating a salary as an exemption. It is not. The duties test governs.

Ignoring off-the-clock work. Required pre-shift setup, post-shift cleanup and mandatory training are usually hours worked.

Redefining the workweek to suit a schedule. The workweek is fixed and recurring. Moving its start day to break a long run of hours across two periods does not remove the premium owed.

What this calculator does not do

The tool states its two main limits on screen, and both are worth reading before you rely on a figure:

• The Fair Labor Standards Act requires 1.5x above 40 hours in a week for non-exempt employees, and some states add a daily threshold or a double-time rule. The calculator does not apply state rules automatically. You enter the hours and the multiplier, so a California employee needs to split daily overtime and double-time hours into the right fields themselves.
• Exempt employees are not owed overtime, and the test is the job duties and salary, not the job title. The tool will happily compute a premium for someone who is not entitled to one.

It also works on one week at a time, takes a single rate rather than a blended regular rate, ignores tax entirely, and knows nothing about union agreements, tipped wage rules or public-sector compensatory time. Gross pay for a week is what it produces: run the result through the paycheck calculator to see what lands in the bank, and check the state pages for local rules. This is general information, not legal advice: see the disclaimer.