How does time and a half work?

To understand how time and a half works, it helps to start with the basic definition and why the law requires it.

Time and a half is overtime pay that equals 1.5 times an hourly team member's regular rate. The FLSA requires it for non-exempt team members who work more than 40 hours in a workweek.

Here's the simple math: If your team member earns $15 per hour, their time-and-a-half rate is $22.50 per hour ($15 × 1.5 = $22.50).

This federal requirement protects hourly teams from being overworked without fair compensation. But here's where it gets tricky: state laws can add their own overtime rules on top of federal requirements.

Not everyone qualifies for overtime pay, and understanding worker classification is crucial.

Non-exempt team members (eligible for overtime): These are employees who must receive time and a half for any hours worked beyond 40 in a workweek. Some of these team members are restaurant servers and kitchen staff, retail associates, salon stylists and barbers, healthcare support staff, and customer service representatives.

Exempt team members (not eligible for overtime): Certain salaried roles are exempt from overtime requirements if they meet both the duties test and the minimum salary threshold. These include executive, administrative, and professional roles; outside sales positions, and certain computer professionals.

To be exempt in 2026, team members generally must earn at least the minimum salary ($684 per week or $35,568 annually) and perform specific job duties.

Once you know who qualifies, the next step is calculating overtime correctly so every paycheck is accurate.

Here’s the basic calculation formula: First, determine your team member’s regular hourly rate. Then multiply that rate by 1.5 to get the overtime rate. Count any hours worked beyond 40 in a workweek, and multiply those overtime hours by the overtime rate to get the overtime pay.

Example 1 — one pay rate: Sarah earns $16 per hour and works 45 hours this week. Her overtime rate is $24 per hour, so her 5 overtime hours total $120. With her regular 40 hours at $640, her total pay comes to $760.

Example 2 — multiple pay rates: James works as both a server and a bartender at different hourly rates. To calculate overtime, first find his weighted average rate by dividing his total regular pay by his total hours. Multiply that rate by 1.5 to get his overtime rate, then apply it to the 5 hours he worked over 40.

Several states go beyond federal rules, so understanding your local requirements is key to staying compliant.

Federal law sets the minimum overtime rules, but several states have stricter requirements. For example:

Because these rules vary widely by state, always check your state’s Department of Labor website to confirm the overtime requirements that apply to your business.

Overtime errors are among the most common—and most costly—payroll mistakes small businesses face. Here's what happens if you don't manage employee overtime properly:

Staying on top of overtime is an ongoing challenge, especially when you’re juggling schedules, compliance rules, and rising labor costs. 

Homebase helps by tracking hours automatically, sending alerts when team members are nearing overtime, and giving you a clear view of labor costs as you build the schedule. And because time and attendance flow directly into Homebase Payroll, it’s easier to reduce manual entry and avoid costly mistakes. Sign up for Homebase today to automate calculating time and a half so you can focus more on building your business.

At Homebase, we rely on up-to-date, authoritative sources to ensure every Question Center article reflects accurate guidance for small business owners. We start with primary information from the U.S. Department of Labor and state labor agencies, verify details using federal overtime fact sheets and state-specific regulations, and supplement with reputable Homebase resources that interpret these rules for real-world operations.

For this piece, we referenced federal overtime guidance from the U.S. Department of Labor, state regulations from California, Colorado, and Alaska, and Homebase expertise on worker classification, payroll, time tracking, and regular rate requirements.