Is overtime taxed at a higher rate?

No. Same rate as regular wages. Withholding can look higher because payroll annualizes a big check, but the over-withholding refunds at year-end.

Do salaried workers get overtime?

Salaried non-exempt workers do. Most salaried workers are exempt and do not.

How is overtime calculated when I have multiple pay rates?

FLSA requires a weighted-average regular rate including non-discretionary bonuses and differentials. Overtime is 1.5x that weighted rate.

Can my employer offer comp time instead of overtime?

Private-sector usually cannot. Public-sector employers can under specific conditions.

Overtime Pay and Taxes (US)

Federal FLSA: 1.5x the regular rate for hours above 40 in a workweek for non-exempt workers. Some states layer daily-overtime rules on top. Overtime is paid at a higher rate, not taxed at a higher rate.

PayslipIQ provides educational information and estimated calculations only. It does not provide tax, legal, financial, accounting, employment, benefits, or payroll advice. PayslipIQ is not a CPA firm, law firm, financial advisor, payroll provider, or tax authority. Always verify your paycheck, deductions, withholdings, and tax position with your employer's payroll department, a qualified CPA, the IRS, your state tax authority, or another appropriately qualified professional. Calculations are estimates; your actual paycheck may differ based on factors specific to your employer, location, benefits elections, and personal tax situation.

Federal FLSA basics

Non-exempt employees only. Exempt salaried managers and professionals do not earn FLSA overtime.
1.5x the regular rate for hours above 40 in a fixed 168-hour workweek.
Workweek can start any day, but is fixed by the employer and applied consistently.
The "regular rate" includes most non-discretionary bonuses and commissions, allocated across the workweek.

State daily-overtime overlays

State	Rule
California	1.5x over 8/day, 2x over 12/day, 1.5x first 8 hours of 7th consecutive day, 2x over 8 on 7th day
Alaska	1.5x over 8/day or 40/week (employers with 4+ employees)
Nevada	1.5x over 8/day if hourly rate is below 1.5x state minimum wage
Colorado	1.5x over 12/day, 12 consecutive hours, or 40/week
Most others	Federal FLSA only (40/week)

The tax myth

"Overtime is taxed at a higher rate." False. Overtime hours are paid at 1.5x the regular rate. They are taxed at the same rate as regular wages.

What can happen: a paycheck with a lot of overtime gets withheld at a higher percentage because the payroll system annualizes it as if every paycheck were that big. The over-withholding refunds at filing.

Salaried non-exempt

Salaried non-exempt workers (rare, usually lower-wage roles) earn overtime. Hourly equivalent is calculated from salary divided by 52 weeks divided by typical 40 hours.

Comp time

Private-sector employers in most states cannot give time off in lieu of overtime pay. Public-sector rules are more flexible.

Authoritative sources

US Department of Labor, Wage and Hour Division
Each state's Department of Labor for state-specific rules

Frequently asked questions

Is overtime taxed at a higher rate?: No. Same rate as regular wages. Withholding can look higher because payroll annualizes a big check, but the over-withholding refunds at year-end.
Do salaried workers get overtime?: Salaried non-exempt workers do. Most salaried workers are exempt and do not.
How is overtime calculated when I have multiple pay rates?: FLSA requires a weighted-average regular rate including non-discretionary bonuses and differentials. Overtime is 1.5x that weighted rate.
Can my employer offer comp time instead of overtime?: Private-sector usually cannot. Public-sector employers can under specific conditions.