Double-time pay means paying an employee twice their straight-time pay, going beyond the standard time-and-a-half rate used for typical overtime. Employers often offer double-time pay for holiday shifts or when employees go well beyond their normal hours.
What you’ll learn
What you’ll learn
Key takeaways about double-time pay
- Double-time pay means paying an employee twice their regular hourly rate, while typical overtime pay is one-and-a-half times that rate.
- Employers often offer double-time pay for holiday shifts, nights and weekends, or extended work hours, though no federal law requires it.
- California is the only state that legally requires double-time pay, though other states have their own overtime rules.
- Keeping accurate records of overtime and double-time pay supports compliance and makes tax and payroll planning easier.
While your business may already have a process for calculating time-and-a-half pay for overtime hours, double-time pay is less familiar territory for many companies. No law requires you to pay double, but it can be a valuable perk for employees who take on extra hours. This guide covers how double-time pay works, why some employers offer it, and what to keep in mind for your organization.
What is the meaning of double-time pay?
The common definition of double-time pay is paying an employee twice their regular hourly wage. For example, if your employee earns $15 per hour as a regular pay rate, their double-time rate hourly wage is $30.
Employers typically reserve double-time pay for special circumstances, such as:
- Employees taking on extra hours during the holiday season
- Workers volunteering for a weekend shift they wouldn’t normally take on
- Covering sudden emergencies or unexpected staff turnover, like rewarding an employee who helps out after a coworker leaves without notice
Next, let’s look at a question that’s often top of mind for employers.
What is the difference between double-time pay and overtime pay?
Employers typically pay overtime at one-and-a-half times an employee’s hourly rate. Double-time pay goes beyond that, doubling the employee’s pay rate.
While the Fair Labor Standards Act (FLSA) governs overtime pay, it doesn’t include a requirement for double-time pay. Your company and your employees decide this.
Pay rate comparison: Regular, overtime, and double-time pay
| Pay type | Rate multiplier | Hourly rate example ($20/hr Base) | Federal FLSA Requirement? | Common triggers |
| Regular pay | 1.0x regular rate | $20.00 | Standard wage requirement | First 40 hours worked in a workweek |
| Overtime pay | 1.5x regular rate | $30.00 | Yes (for hours over 40) | Standard weekly overtime hours |
| Double-time pay | 2.0x regular rate | $40.00 | No (except California state law) | Federal holidays, extended shifts (50+ hrs), California 12+ hour daily shifts |
To learn more about how this factors in during tax time, we spoke with Peggy James, a certified public accountant and small business consultant, on what to keep in mind.
Are overtime and double-time taxed differently?
“In most cases, overtime and double-time pay are not taxed differently, meaning they’re not taxed at different rates. Because double-time pay is higher than overtime (time and a half) pay, though, employees will usually end up paying more taxes on double-time pay even if both are subject to the same tax rate.”
— Peggy James, Certified Public Accountant
Next, let’s look at who’s eligible for double-time pay.
Who is eligible for double-time pay?
Generally, nonexempt employees who work more than 40 hours in a given work week are eligible for overtime or double-time pay. Most companies pay time-and-a-half for the bulk of overtime hours and reserve double-time pay for specific circumstances, such as holidays, nights and weekends, or other extenuating situations. However, some choose to pay double-time for every hour worked beyond 40.
Your company or collective bargaining agreement may set specific double-time rules. HR teams should follow these directives carefully so employees receive the pay they’re due.
Keep this detail in mind
Exempt or salaried employees aren’t usually eligible for either overtime or double-time pay.
Next, let’s look at the situations that typically call for double-time pay.
Situations that trigger double-time pay
For most companies, three key situations tend to trigger double-time pay:
- Holiday work: Many employees prefer spending holidays with family or friends rather than at work, so companies often offer double-time pay on federal holidays to encourage more people to work. It’s not mandatory, but it can boost interest in holiday shifts.
- Working nights or weekends: Most employers don’t have to pay double-time pay for employees who work nights or weekends, but use it to reward these less desirable shifts and make them easier to fill.
- Extended work hours: Companies may also incentivize employees to take on extra shifts during the workweek. For example, overtime pay could start after 40 hours worked, with double-time pay kicking in at 50 or 55 hours per week.
If you’re considering adding or updating a double-time pay policy, these are the most common triggers to build your policy around.
Legal regulations surrounding double-time pay
If your company permits or asks nonexempt employees to work extra hours, you’re generally required to pay more for that time. Both state and federal regulations govern overtime.
State-specific regulations
California is the only state with a current double-time overtime law. You must pay employees in the Golden State double their hourly rate if they work more than 12 hours in a day or more than eight hours a day during seven consecutive days of work.
Several other states have their own overtime pay rules, though these require time-and-a-half, not double-time. For example, in Alaska, you must pay employees who work more than eight hours a day or 40 hours a week 1.5 times their regular rate. Florida law includes a provision that provides extra pay for manual laborers who work more than 10 hours a day. However, this rarely applies in practice, as it doesn’t extend to employers already covered by the FLSA, which includes nearly all Florida businesses. Oregon requires mill, factory, and manufacturing workers receive 1.5 times their regular pay after 10 hours in a day or 40 hours a week.
Your HR team should stay well-versed in the state overtime pay regulations in any state where you have employees.
What are the federal double-time rules?
The FLSA guarantees that nonexempt workers receive overtime pay for any hours above 40 in a given work week, at a minimum of one-and-a-half times their regular pay rate. Per federal law, employees aged 16 and older have no limits on the number of hours they can work per week, so potential earnings can add up quickly. The FLSA doesn’t require additional pay for weekend or holiday work unless the employee has already worked 40 hours, although companies may choose to offer it.
The FLSA defines “hours worked” as the time a worker is required to be on premises, on duty, or at a specific work site. Companies can’t average work hours over multiple weeks.
Doubling wages for employees who take on undesirable hours or go the extra mile can help them feel appreciated, but it’s a good idea to keep some basics in mind. We asked Peggy James, a certified public accountant, what to look out for.
Mistakes to avoid with double-time pay
Here are some things to keep in mind to avoid payroll errors when offering double-time pay to employees.
Peggy’s perspective
- Be fair and consistent in how you implement double-time pay by offering it to all employees in a work group or department rather than only making it available to one or a few. This can help to avoid issues with employee morale if some employees appear to have the option to earn more than their colleagues.
- Communicate clearly with employees about which situations would qualify for double-time pay. Setting expectations early on can help limit problems and misunderstandings later.
- Make sure you budget for it, especially if you offer it toward the end of your fiscal year. If you know you’ll need to offer double-time pay during certain times of the year, planning ahead will make sure you have the cash flow available when it’s needed.
How to calculate double-time pay
Calculating double-time pay is fairly straightforward, but depending on your overtime rules, you may need to make multiple calculations. If you are simply calculating double-time pay after 40 hours, then you would multiply those extra hours by two to get the employee’s double-time rate and multiply that by the number of extra hours.
If you pay overtime for a set number of hours and then transition into double-time pay, the calculations are more involved.
For example, if your employee earns $20 per hour, with time and a half pay at 40 hours and double-time pay at 50 hours, here is what the payment for a 55-hour work week might look like:
- $20 x 40 hours = $800
- $30 ($20 x 1.5) x 10 hours = $300
- $40 ($20 x 2) x 5 hours = $200
Total pay: $1,300 (less deductions and taxes)
Your payroll processing team or vendor can ensure that these calculations are handled carefully and accurately. It’s also important to pay attention to gross pay vs. net pay in these payroll calculations.
Lastly, a question that we sometimes hear from employers looking for even another way to reward those who put in more time and effort by offering three times the regular wage.
Pro tip: Is triple-time pay an option?
Yes, you can pay your employees triple-time wages – or more! If you want to pay more than double-time, you might want to consider offering a one-time bonus in specific situations. That can give you some flexibility on when and how much to offer employees who work more or produce at a higher level.
— Peggy James, Certified Public Accountant
Keeping accurate records benefits employees and employers alike
Keeping accurate compensation records is critical for payroll and tax planning. Communicating your policies, and any changes to them, helps employees know what to expect.
If more of your team members work extra hours and your payroll team could use support calculating overtime and double-time compensation, OnPay’s payroll software can help. Our technology standardizes and automates these calculations to ensure you pay employees the right amount, every time. Reach out to our team anytime you have questions.
Take a tour to see how easy payroll can be.
Jon Davis is the Sr. Content Marketing Manager at OnPay. He has over 15 years of experience writing for small and growing businesses. Jon lives and works in Atlanta.