Overtime Calculator: How Contractors Calculate Crew OT Pay

A kitchen job ran four days long on me a few years back. Hidden rot behind the sink, the kind you only find on demo day. To hit the homeowner’s deadline I put the crew on Saturdays and a couple of 10-hour days. The work got done. The problem was payroll. I had bid those hours at straight time in my head and paid them at time-and-a-half in real life. That gap came straight out of my profit.

That is what an overtime calculator is really for. Not just running payroll. Pricing the bid so overtime does not eat you alive when a job runs long. Try EstimationPro free if you want the labor math built into your estimates from the start.

Quick Answer

Overtime pay is calculated at 1.5 times the regular hourly rate for every hour worked over 40 in a workweek. The formula is simple: regular rate x 1.5 x overtime hours. A carpenter at $30 per hour earns $45 per overtime hour. The catch most contractors miss is that overtime should be figured on the burdened labor rate, not the base wage, because payroll taxes and workers comp ride on every hour you pay. Some states like California also require daily overtime over 8 hours.

The Overtime Formula, Step by Step

You do not need software to run the basic math. You need the right rate and the right rules. Here is the order I work it in.

1. Find the regular hourly rate. This is the base wage you pay the worker. Carpenters typically run $20 to $45 per hour. General laborers run $15 to $35.
2. Confirm the overtime threshold. Federal law (FLSA) sets it at 40 hours in a single workweek. Anything past 40 is overtime.
3. Multiply the regular rate by 1.5. That carpenter at $30 becomes $45 per overtime hour.
4. Count the overtime hours. Only the hours past 40 that week. Not the whole timesheet.
5. Add it up. Regular pay (up to 40 hours) plus overtime pay (1.5x for the rest).
6. Layer in the burden. Then multiply the wage by your labor burden so you know the true cost, not just the paycheck.

Most contractors stop at step 5. The ones who stay profitable do step 6 every time.

Regular vs Overtime vs True Burdened Cost

Here is where the money hides. The paycheck number is not your cost. Your cost includes the burden: FICA, workers comp, unemployment, liability insurance. On construction labor that burden usually runs 30 to 40 percent on top of the wage. The table below uses a 35 percent burden so you can see the spread.

Trade	Base Rate	OT Rate (1.5x)	Burdened OT Cost (+35%)
General laborer	$22/hr	$33/hr	$44.55/hr
Carpenter	$30/hr	$45/hr	$60.75/hr
Lead carpenter	$40/hr	$60/hr	$81.00/hr

That carpenter you think costs $30 an hour costs you almost $61 an hour the minute the clock passes 40. If you bid the job at the base wage and the crew runs over, you are paying double what you priced.

Worked Example 1: One Carpenter, 50-Hour Week

Say a carpenter runs 50 hours to close out a bathroom that fell behind.

• Regular pay: 40 hours x $30 = $1,200
• Overtime pay: 10 hours x $45 = $450
• Gross paycheck: $1,650

Now the real cost with a 35 percent burden:

• Burdened regular cost: $1,200 x 1.35 = $1,620
• Burdened OT cost: $450 x 1.35 = $607.50
• True labor cost for the week: $2,227.50

If you bid that week at a flat burdened rate with no overtime, you priced roughly $2,000 and spent $2,228. That is $228 gone on one worker, one week. Run a three-man crew and it adds up fast.

Worked Example 2: Crew Saturday Push

Three guys, one Saturday, 12 hours each to hit a hard deadline. Everyone is already past 40 for the week, so every hour is overtime.

Worker	Base Rate	OT Rate	Hours	OT Wages
Carpenter	$30	$45	12	$540
Laborer 1	$22	$33	12	$396
Laborer 2	$22	$33	12	$396

Total overtime wages for the day: $1,332. Add the 35 percent burden and the real cost is $1,798.20 for one Saturday. If that push was not in the bid, it came off the bottom line. Every dollar of it.

I have learned to either build a contingency for overtime into the bid or schedule the job so I never need it. Usually both.

State Rules That Trip Up Contractors

Federal overtime is the floor, not the ceiling. Several states stack their own rules on top, and they catch a lot of contractors who cross state lines for work.

• California: Overtime after 8 hours in a single day, even if the week stays under 40. Double-time after 12 hours in a day. A 10-hour day means 2 hours of daily OT no matter what the weekly total is.
• Alaska, Nevada, Colorado: Daily overtime rules over 8 or 12 hours depending on the situation.
• Prevailing wage jobs: Public work under Davis-Bacon has its own overtime and fringe rules that override the standard math.

If you work a state with daily overtime, your overtime calculator has to check the day, not just the week. I have seen guys eat a double-time penalty because they treated a 12-hour California day like a normal week.

Where Contractors Lose Money on Overtime

A few mistakes I see over and over, and a couple I have made myself.

• Bidding labor at the base wage. The wage is the paycheck. Your cost is the burdened rate. Skip the burden and you underbid every job.
• Calculating OT on the wage instead of the burdened rate. Workers comp and payroll taxes ride on overtime hours too. The premium is not burden-free.
• Forgetting daily overtime. In daily-OT states, a long single day triggers OT even when the week is light.
• No overtime line in the estimate. If a job has any chance of running long, price the risk. Hope is not a schedule.
• Salaried foreman confusion. Some supervisors are overtime-exempt, some are not. Misclassify one and the back pay claim costs more than the OT would have.

Run your numbers through a labor cost calculator before you send the bid, and check the loaded rate with a burdened labor rate calculator so the overtime premium sits on the real cost, not the bare wage.

Frequently Asked Questions

How do you calculate overtime pay for construction workers? Take the worker’s regular hourly rate, multiply by 1.5, and apply it to every hour over 40 in the workweek. A laborer at $22 per hour earns $33 per overtime hour. For an accurate job cost, multiply that overtime wage by your labor burden of 30 to 40 percent so taxes and insurance are covered.

How do contractors price overtime into a bid? Estimate the labor hours, flag any week or day likely to push past the overtime threshold, and price those hours at the burdened overtime rate. Many contractors add a small labor contingency of 5 to 10 percent on tight-deadline jobs. A labor cost calculator makes it fast to model regular and overtime hours side by side before you commit to a number.

Is overtime 1.5x or 2x? Federal law requires 1.5x (time-and-a-half) for hours over 40 per week. Double-time (2x) is not required federally. California requires double-time after 12 hours in a day or after 8 hours on the seventh consecutive workday. Always check your state.

Does overtime get calculated on the burdened rate or the base wage? Pay the worker 1.5x their base wage. But for job costing, apply your burden to the overtime wages too, because FICA, workers comp, and unemployment taxes apply to overtime hours just like regular hours. Costing OT on the bare wage understates your real expense by 30 to 40 percent.

Are salaried foremen entitled to overtime? It depends on their duties and salary level, not just the title. Some supervisors qualify as exempt under FLSA, many do not. Misclassifying a worker as exempt can trigger back-pay claims, so verify the exemption before you assume no overtime is owed.

The Real Lesson on Overtime

Overtime is not the enemy. Pricing it wrong is. When I run a bid now I decide up front whether the schedule needs OT, I price those hours at the burdened time-and-a-half rate, and I build a contingency for the surprises that always show up behind the walls. Good, fast, or cheap. You can pick two. If a client wants it fast, the overtime is part of the deal and it belongs in the number.

The math is not hard. Staying disciplined about it on every single bid is the hard part. That is exactly why I built software to handle it.

Contractors using EstimationPro report cutting estimate time from hours down to minutes while pricing labor, burden, and overtime correctly the first time. EstimationPro does not just build the estimate. It sends the proposal automatically, follows up with the homeowner so you win more of the bids you already send, and turns the approved job into an invoice you can collect on. Stop letting overtime quietly drain your margin. Try EstimationPro free and price every hour the right way.

Pricing reflects 2026 national wage ranges and varies by region, trade, and union status. Verify local rates and your state overtime rules before bidding.

Sources: U.S. Department of Labor, Fair Labor Standards Act (FLSA) overtime provisions; U.S. Bureau of Labor Statistics wage data (SOC 47-2031 carpenters, 47-2061 construction laborers, May 2024); California Department of Industrial Relations overtime and double-time rules; and field experience pricing crew labor on remodeling jobs.