How Much Does Overtime Actually Add to Your Paycheck?
Overtime pays 1.5x your regular rate (2x after 12 hours in California). But after taxes take their cut, how much do you actually keep?
The overtime math
In California, overtime kicks in at:
- 1.5x after 8 hours/day OR 40 hours/week
- 2x after 12 hours/day
- 2x for hours worked on the 7th consecutive day
Real example: $50/hr base rate
| Hours OT/week | OT Rate | Extra Gross/2wk | Extra Net/2wk | Extra Net/Year |
|---|---|---|---|---|
| 4 hrs/wk | $75/hr | $600 | ~$378 | ~$9,828 |
| 8 hrs/wk | $75/hr | $1,200 | ~$744 | ~$19,344 |
| 12 hrs/wk | $75/hr | $1,800 | ~$1,098 | ~$28,548 |
Why you only keep ~63% of OT: Overtime income is taxed at your marginal rate (the highest bracket you're in). For a CA worker already earning $100K+, that means ~22% federal + ~9.3% CA + 7.65% FICA = ~39% total tax on each OT dollar.
OT at different base rates (4 hrs/week of 1.5x OT)
| Base Rate | OT Rate (1.5x) | Extra/Year Gross | Extra/Year Net (approx) |
|---|---|---|---|
| $30/hr | $45/hr | $9,360 | ~$6,552 |
| $40/hr | $60/hr | $12,480 | ~$8,112 |
| $50/hr | $75/hr | $15,600 | ~$9,828 |
| $60/hr | $90/hr | $18,720 | ~$11,232 |
| $75/hr | $112.50/hr | $23,400 | ~$13,572 |
Is overtime worth it?
Financially yes — you're still earning more per hour than your base. But consider:
- Diminishing returns: each OT hour is taxed at your highest marginal rate
- Burnout: healthcare workers doing chronic OT have higher turnover
- Mandatory OT vs. voluntary: union contracts often limit mandatory OT
See what real workers take home
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