Time and a Half

In this guide, we break down how time and a half pay works, who qualifies, and how to calculate it without losing your mind (or your payroll records).

What is time and a half?

Time and a half means paying an employee 1.5 times their normal hourly rate when they work overtime. So, if someone usually earns $10 an hour, their time and a half rate would be $15 for each extra hour worked.

• In the US, it’s part of federal law or FLSA. It says that most hourly workers (and even some salaried ones) must get time and a half pay if they work more than 40 hours in one week.

• In the UK, the law doesn’t force employers to pay time and a half for overtime. But there’s a catch; your employees’ average pay must never fall below the National Minimum Wage, even with overtime included. Many employers do offer time and a half as part of their contracts or company policy, especially to keep staff happy and avoid burnout.

Why employers should care

If you’re an employer or manager, here’s why this matters to you:

• It’s a legal must (in the US, and sometimes by contract in the UK).

• It keeps your employees motivated during peak periods.

• It helps with fair scheduling and workforce planning.

• It protects your business from legal trouble or wage disputes.

⚠️ Friendly reminder: In the US, failing to pay proper overtime can land you in hot water (think: back pay + penalties). In the UK, getting overtime wrong can also lead to wage claims or disputes over holiday pay.

How much is time and a half?

Let’s break it down with a quick example:

💡Quick tip for payroll: To calculate time and a half, just take the regular hourly rate and multiply it by 1.5. Then multiply that number by how many overtime hours were worked.

For salaried workers in the US who are non-exempt, you’ll need to first work out their hourly rate by dividing their weekly salary by 40.

Who receives time and a half pay?

This one depends on where your business is based and how your employees are classified. Let’s break it down.

🇺🇸 In the United States

The Fair Labor Standards Act (FLSA) says that non-exempt employees must be paid time and a half when they work over 40 hours in a workweek.

So, who’s non-exempt?

Non-exempt employees (get time and a half):

• Most hourly workers (retail, hospitality, warehousing, etc.)

• Some salaried workers who earn below a certain amount and don’t fall under special job categories

• Workers not in executive, professional, or administrative roles

Exempt employees (don’t get time and a half):

• Salaried staff in executive, admin, or professional roles

• Workers earning above the FLSA salary threshold (currently under legal review)

• Independent contractors (they’re not employees)

⚠️ Heads up: Some states (like California, New York, and Massachusetts) have stricter rules. Always check your state’s labour laws.

🇬🇧 In the United Kingdom

Time and a half isn’t a legal requirement, but it might still apply depending on:

• What’s written in the employment contract

• Whether the company has an internal policy or union agreement

• If regular overtime is worked and affects holiday pay calculations

In most cases, hourly workers or shift workers may receive time and a half for:

• Working unsocial hours (nights, weekends)

• Going over contracted hours

• Voluntary overtime (if agreed)

Salaried staff? It depends on the contract and whether their weekly hours are flexible or capped.

How to calculate time and a half

Whether you’re paying someone by the hour or on a salary, getting overtime pay right is important, for both legal reasons and keeping your team happy. Here’s how to work it out without giving yourself a headache.

For hourly employees

This one’s simple maths. You only need two things:

• The employee’s regular hourly rate

• The number of overtime hours worked

The formula:

Hourly rate × 1.5 = overtime rate
Overtime rate × overtime hours = total overtime pay

👉 Example:

• Let’s say Jane earns $12/hour and works 6 extra hours this week.

• Her overtime rate is $12 × 1.5 = $18/hour

• Overtime pay = £$18 × 6 = $108

For salaried employees (non-exempt)

It’s a bit more fiddly for salaried workers who qualify for overtime, but still manageable. Here's what you should do:

• Find the weekly salary e.g. $600 per week

• Divide by standard hours (usually 40) $600 ÷ 40 = $15/hour

• Multiply by 1.5 to get the overtime rate $15 × 1.5 = $22.50/hour

• Multiply by overtime hours worked 5 extra hours × $22.50 = $112.50 overtime pay

So, for that week, they’d earn $600 + $112.50 = $712.50 total pay

Do bonuses and holiday work count towards time and a half?

Overtime can get a bit trickier when bonuses and bank holidays enter the mix. Here’s what you need to know.

Bonuses

Bonuses can affect how time and a half is calculated, but only certain types.

✅ Non-discretionary bonuses do count

These are bonuses promised in advance like:

• Hitting sales targets

• Meeting performance goals

• Productivity incentives

Since they’re part of the employee’s expected earnings, they must be included in their “regular rate of pay” when calculating overtime.

❌ Discretionary bonuses don’t count

These are surprise or one-off rewards the company gives at its own choice, like:

• Holiday bonuses

• Spot bonuses for good behaviour

• Surprise team rewards

Since they’re not guaranteed or expected, you don’t need to factor them into the overtime pay rate.

👉 Example:

Let’s say:

• Mark earns $500 for 40 hours of work

• He also earns a $100 performance bonus (non-discretionary)

• He works 5 hours of overtime that week

Here’s the correct way to do it:

• Total pay with bonus: $500 + $100 = $600

• Regular rate: $600 ÷ 45 hours = $13.33/hour

• Overtime rate: $13.33 × 1.5 = $20/hour

• Overtime pay: 5 × $20 = $100

⚠️ If you skipped the bonus, you’d underpay him. And underpaying overtime? That’s a fast track to grumpy staff or legal trouble.

What about weekends and holidays?

Let’s clear up a big myth: time and a half isn’t automatically required for weekends or holidays.

It depends on:

• Your contract or company policy

• Any union agreements

• Whether the hours push the employee over 40 hours in a week (in that case, it’s overtime either way)

In practice:

• US law doesn’t require higher pay for working on bank holidays or weekends, unless the extra hours exceed 40/week.

• UK law also doesn’t require it, but many employers offer enhanced rates (like time and a half or double pay) to keep staff happy.

💡Pro tip: If you promise time and a half for Christmas shifts or Sunday hours, write it clearly in the employment contract or staff handbook.

What holidays do you get paid time and a half?

Since there’s no law that says employees must be paid time and a half on holidays, it all comes down to your company’s own policy or the employee’s contract.

If it’s in the contract = it applies

If you’ve promised in writing that employees will get time and a half (or double time!) for working on public holidays, then yes, you must honour that. Otherwise, there's no legal requirement.

Typical holidays where time and a half might be offered:

Most companies that offer holiday overtime do so for:

• Christmas Day

• Boxing Day (UK) / Day after Christmas (US)

• New Year’s Day

• Easter (UK)

• Good Friday (UK)

• Bank Holidays (UK)

• Thanksgiving (US)

• Independence Day (US)

• Labour Day (US)

These are days when many businesses are closed, so if your team works them, offering time and a half is a nice way to say “thanks for showing up.”

So what should employers do?

• Be clear in your policies about which holidays qualify for premium pay

• Put it in writing (contracts, employee handbook, shift guidelines)

• Stay consistent; picking favourites can cause resentment fast

💡Pro tip: Want to stand out as an employer? Offering time and a half (or even double pay) on major holidays can boost morale and retention; especially in sectors like retail, healthcare, or hospitality.