Overtime in Texas is calculated under federal law: a non-exempt employee earns at least 1.5 times their regular rate of pay for every hour worked beyond 40 in a single workweek.1Office of the Law Revision Counsel. 29 USC 207 – Maximum Hours Texas has no separate state overtime rate. The arithmetic looks simple, but the “regular rate” is not always your hourly wage, and the formula shifts depending on whether you are paid hourly, on salary, by multiple rates, or with tips. Working out what you are actually owed means pinning down three things in order: your workweek, your regular rate, and the formula that fits your pay structure.
The 40-Hour Workweek Rule
Overtime is measured one workweek at a time. A workweek is a fixed, recurring period of 168 hours — seven consecutive 24-hour days. Your employer picks the starting day and time, and once set it stays the same. An employer can only change it if the change is permanent and not designed to dodge overtime.2eCFR. 29 CFR 778.105 – Determining the Workweek
Each week stands alone. Your employer cannot average hours across weeks. Work 50 hours one week and 30 the next, and you are owed 10 hours of overtime for the first week, even though the two-week average is 40.
Finding Your Regular Rate of Pay
Overtime is based on your regular rate, not necessarily your base wage. The regular rate includes almost everything you earned during the workweek: base pay, non-discretionary bonuses, shift differentials, and commissions all fold in.3eCFR. 29 CFR Part 778 Subpart C – Payments That May Be Excluded From the Regular Rate
A few payments are excluded:
- Gifts and holiday bonuses that are not tied to hours worked, productivity, or efficiency.
- Truly discretionary bonuses, where both the decision to pay and the amount are up to the employer and were not promised in advance.
- Expense reimbursements that cover actual business costs rather than compensating you for work.
If a bonus is tied to performance, production, or attendance, it belongs in the regular rate before overtime is calculated. Leaving it out undercounts what you are owed.
Overtime Formulas by Pay Structure
The 1.5 multiplier is constant. How you reach the regular rate it multiplies is not.
Hourly Employees
For a straight hourly worker, the regular rate is usually just the hourly wage (plus any non-discretionary additions above). Multiply by 1.5 to get the overtime rate.
Example: You earn $20.00 per hour and work 45 hours.
- Straight-time pay: 40 × $20.00 = $800.00
- Overtime rate: $20.00 × 1.5 = $30.00
- Overtime pay: 5 × $30.00 = $150.00
- Total gross: $950.00
Salaried Non-Exempt Employees
Being on a salary does not, by itself, cancel your overtime rights. If your salary is meant to cover a standard 40-hour week, divide the weekly salary by 40 to get the regular rate, then add 1.5 times that rate for each hour past 40.4U.S. Department of Labor. Fact Sheet 23 – Overtime Pay Requirements of the FLSA
If the salary is intended to cover a longer set week, say 45 hours, divide by 45 instead. Because those 5 extra hours have already been paid at straight time through the salary, you only need the additional half-time premium for each one.
Example: $900 weekly salary covering a 45-hour workweek.
- Regular rate: $900 ÷ 45 = $20.00
- Half-time premium: $20.00 × 0.5 = $10.00
- Additional overtime pay: 5 × $10.00 = $50.00
- Total gross: $950.00
Multiple Pay Rates in the Same Week
If you do different jobs at different hourly rates in the same workweek, your employer calculates a weighted average. Total your earnings across all rates, then divide by total hours worked.4U.S. Department of Labor. Fact Sheet 23 – Overtime Pay Requirements of the FLSA
Example: 30 hours at $15.00 and 20 hours at $20.00, 50 hours total.
- Straight-time earnings: (30 × $15.00) + (20 × $20.00) = $850.00
- Weighted regular rate: $850.00 ÷ 50 = $17.00
- Half-time premium: $17.00 × 0.5 = $8.50
- Overtime pay: 10 × $8.50 = $85.00
- Total gross: $935.00
The half-time premium applies because all 50 hours have already been paid at straight time through the two rates. The employer only owes the extra 0.5 on the overtime hours.
Tipped Employees
If your employer takes a tip credit, your regular rate is your direct cash wage plus the tip credit, not just the cash you take home. Federal law sets the minimum direct cash wage at $2.13 per hour and caps the tip credit at $5.12 (the difference between $7.25 and $2.13). The tip credit used during overtime hours must match what was applied during straight-time hours.5U.S. Department of Labor. Overtime Calculation Examples for Tipped Employees
Example: $2.13 direct wage with a $5.12 tip credit, so the regular rate is $7.25.
- Overtime rate: $7.25 × 1.5 = $10.875
- Minimum cash due per overtime hour: $10.875 − $5.12 = $5.755
Your employer must pay at least $5.76 in direct cash wages for each overtime hour, with the remaining $5.12 covered by tips you actually received.
The Fluctuating Workweek Method
Some employers use the fluctuating workweek method. You get a fixed weekly salary that covers every hour you work, whether 35 or 50. Because every hour is already paid at straight time through the salary, the employer owes only a half-time premium (0.5 times the regular rate) for each overtime hour.6eCFR. 29 CFR 778.114 – Fluctuating Workweek Method of Computing Overtime
This method is only legal when all of the following are true:
- Your hours genuinely fluctuate week to week.
- You and your employer have a clear, mutual understanding that the fixed salary covers all hours.
- The salary is high enough that even in your heaviest weeks it does not drop any hour below minimum wage.
- You still receive the half-time overtime premium on top of the salary.
Because the regular rate drops as hours rise (the same salary spread over more hours), this method usually produces less overtime pay than the standard formula. If any condition fails, your employer must use the full 1.5 multiplier.
Are You Even Entitled to Overtime?
The default is yes. Employers bear the burden of proving you fit one of the FLSA’s exempt categories, and losing overtime rights requires failing both a salary level test and a duties test.
The salary threshold is currently $684 per week ($35,568 per year). The U.S. Department of Labor tried to raise it in 2024, but a federal court in Texas vacated that rule in November 2024, so enforcement reverted to the 2019 level.7U.S. Department of Labor. Earnings Thresholds for the Executive, Administrative, and Professional Exemption If you earn less than $684 per week on a salary basis, you are entitled to overtime regardless of your duties.
Workers who clear the salary bar can still be non-exempt if their duties do not fit an exempt category: executive (primary duty is managing the business or a department, regularly directing at least two full-time employees, with real authority over hiring and firing); administrative (office or non-manual work directly related to business operations, with independent judgment on significant matters); professional (advanced knowledge in a specialized field or original creative work); computer employee (systems analyst, programmer, software engineer, or similar, at $684 per week on salary or at least $27.63 per hour); or outside sales (making sales or taking orders away from the employer’s place of business).8U.S. Department of Labor. Fact Sheet 17A – Exemption for Executive, Administrative, Professional, Computer and Outside Sales Employees Under the FLSA A separate highly compensated employee test applies at $107,432 per year or more, where meeting just one exempt duty can be enough.7U.S. Department of Labor. Earnings Thresholds for the Executive, Administrative, and Professional Exemption
Being salaried does not automatically make you exempt. Many salaried Texas workers are non-exempt because their duties do not meet these criteria, and they are entitled to full overtime.
What Counts as Hours Worked
Your calculation is only as accurate as your hours total. Federal rules count more than many workers realize.
Travel time. A normal home-to-work commute is unpaid. But travel during the workday, like driving between job sites, counts as work time. A one-day assignment to another city is compensable travel, less whatever you would normally spend commuting. Overnight travel that falls during your regular working hours counts as work time even on days you would not normally work.9U.S. Department of Labor. Fact Sheet 22 – Hours Worked Under the FLSA
Training and meetings. Training sessions, meetings, and lectures count as hours worked unless all four of these are true: the event is outside your normal hours, attendance is voluntary, the content is not directly related to your job, and you do no other work during the session. If one condition fails, the time is paid.9U.S. Department of Labor. Fact Sheet 22 – Hours Worked Under the FLSA
On-call time. If you just have to leave a phone number and can otherwise live your life, the time usually is not compensable. If restrictions are tight enough that you cannot use the time for personal activities, such as having to stay within minutes of the workplace, that time counts.10eCFR. 29 CFR 553.221 – Compensable Hours of Work
Time-clock rounding. Employers may round clock-in and clock-out times to the nearest quarter hour, but rounding has to be neutral over time. One to seven minutes can be rounded down; eight to fourteen must be rounded up. An employer that always rounds down violates the FLSA.11U.S. Department of Labor. Fact Sheet 53 – The Health Care Industry and Hours Worked
Comp Time Is Not a Substitute
Some Texas employers offer “comp time,” paid time off in a future week instead of overtime cash. For private-sector employers, this is illegal. The FLSA permits compensatory time in lieu of overtime pay only for state and local government employees, not for private businesses.12Office of the Law Revision Counsel. 29 USC 207 – Maximum Hours If a private employer gives you time off instead of paying overtime in cash, you can still claim the unpaid wages.
If the Math Shows You Were Underpaid
Once you have run the calculation and know the number, you have options. You can file a wage claim with the Texas Workforce Commission under the Texas Payday Law. The deadline is 180 days from the date the unpaid wages were originally due, and claims received later can be denied.13Texas Workforce Commission. Texas Payday Law – Wage Claim You can also file a federal complaint with the DOL’s Wage and Hour Division at 1-866-487-9243; complaints are confidential and retaliation is prohibited.14U.S. Department of Labor. How to File a Complaint
A private lawsuit is the third route. The federal statute of limitations is two years from the violation, stretched to three years if the employer’s violation was willful.15Office of the Law Revision Counsel. 29 USC 255 – Statute of Limitations A successful FLSA claim entitles you to the unpaid overtime plus an equal amount in liquidated damages, effectively doubling what you are owed, along with reasonable attorney’s fees and court costs.16Office of the Law Revision Counsel. 29 USC 216 – Penalties
Employers must keep records of each employee’s daily hours, weekly totals, and overtime pay for at least three years.17eCFR. 29 CFR 516.2 – Records to Be Preserved If your employer did not keep accurate records, courts may accept your reasonable estimate of hours worked, which is one reason it helps to keep your own log alongside any pay stubs.