Just as it sounds, double-time pay differs from straight-time pay in that employees are paid twice their typical hourly rate as a form of overtime pay. While overtime pay is typically one-and-a-half times an employee’s regular pay rate, double-time pay often comes into play on holidays or for going above and beyond normal hours, for example.
What you’ll learn
What you’ll learn
Updated: February 14, 2025
Key takeaways about double-time pay
- Double-time pay differs from typical overtime pay in that double-time pay is double the pay, while overtime pay is usually one-and-a-half times the employee’s regular hourly rate
- There are a few specific situations that may trigger double-time pay for your business.
- It’s critical to pay attention to legal regulations that govern double-time pay at both the federal and state level
- It’s also essential to keep good records for both overtime and double-time pay
While your business may already have a regular process in play for calculating time-and-a-half pay for overtime hours, not every company is as familiar with double-time pay. In fact, you are never required to pay double, but it is definitely a welcome perk for employees who put in extra hours. In this guide, get the details on 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 would be $30.
This version of overtime pay is typically reserved for special circumstances. For example,
- Employees may take on extra hours during the holiday season
- Workers volunteer to help out during a weekend shift they would not normally take on
- Extra help during sudden emergency situations or employee turnover — if a staffer leaves without a lot of notice, you can reward double wages if an employee helps in a pinch
Now that we better understand double-time pay, let’s move on to a question that’s typically top-of-mind for employers.
What is the difference between double-time pay and overtime pay?
In a nutshell, overtime pay is usually paid at one-and-a-half times an employee’s hourly rate, while double-time pay goes beyond that to double the employee’s pay rate. Per federal law, employees age 16 and older have no limits on hours worked per week, so potential earnings can add up quickly.
While the Fair Labor Standards Act (FLSA) governs overtime pay, it doesn’t include a requirement for double-time pay. This should be decided upon between your company and your employees.
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 get into the details of who can actually get paid double-time in an organization.
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, although most companies pay time-and-a-half for most overtime and save double-time pay for more special circumstances. While some companies opt to pay double-time pay for every hour beyond 40, most start with time-and-a-half, saving double-time pay for holidays, nights and weekends, and other extenuating circumstances.
In addition, your company or your collective bargaining agreement may specify special agreements related to double-time pay. It’s important for HR teams to carefully follow these directives so employees receive the pay they are due.
Keep this detail in mind
Exempt or salaried employees are not usually eligible for either overtime or double-time pay.
Next, let’s explore some scenarios that may call for employers doubling wages for employees.
Situations that trigger double-time pay
For most companies, there are three key situations that could trigger double-time pay:
- Holiday work: Since many employees would rather spend their holidays with family or friends than at work, savvy companies often offer double-time pay on federal holidays to encourage greater participation. This is not mandatory, but it can definitely spike interest in holiday work.
- Working on weekends: Again, double-time pay is not required for employees who work at night or on weekends, although many companies choose to reward this work with extra pay. These shifts are often less desirable, so this incentive can entice more workers to willingly adopt these hours.
- Excessive work hours: Finally, many companies choose to incentivize employees who are willing to take on an extra shift or two in a work week. For example, they could start overtime pay after 40 hours worked and move into double-time pay at 50 or 55 hours of work per week.
If you are considering adding or updating your double-time pay policy, it’s a good idea to review the situations that might trigger this bonus pay in your organization.
Legal regulations surrounding double-time pay
If your company permits or asks nonexempt employees to work extra hours, you are generally required to pay more for this work and time. There are both state and federal regulations that govern overtime.
State-specific regulations
California is the only state with a current double-pay overtime law. Employees in the Golden State must be paid double their hourly rate if they work more than 12 hours a day or work more than eight hours per day over seven consecutive days of work.
Many other states have specific overtime pay regulations. In Alaska, for example, if employees work more than eight hours a day or 40 hours per week, they must be paid 1.5 times their typical pay rate. Manual laborers in Florida have a workday limit of 10 hours and everything beyond that requires extra pay. Further, mill, factory, and manufacturing workers in Oregon must receive one-and-a-half overtime pay after working more than 10 hours in a day or 40 hours in a work week.
Your HR team should be well-versed in your state’s overtime pay regulations and stay informed of the latest laws.
What are the federal double-time rules?
The Fair Labor Standards Act guarantees that nonexempt workers receive overtime pay for any hours above 40 in a given work week. The minimum overtime pay is set at one-and-a-half times regular pay. It doesn’t entail additional pay on weekends or holidays unless the employee has reached 40 hours of work already, although companies can choose to add this option.
“Hours worked” are defined as the time a worker is required to be on premise, on duty, or at a specific work site. Companies are not permitted to average work hours over a two-week span or longer.
Though doubling wages for employees who take on undesirable hours or go the extra mile can help employees to feel appreciated, its a good idea to keep some basics in mind. Once more, we caught up with Peggy James, a certified public accountant, about what to look out for.
Mistakes to avoid with double-time pay
Here are some things to keep in mind when you’re considering offering double-time pay to your 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 track of double-time compensation pays dividends for employees and employers
Keeping accurate compensation records is critical for payroll and tax planning, as is clearly communicating your policies and any ongoing updates with your employees.
If more of your team members are working extra hours and your payroll team could use support with calculating overtime and double-time compensation, OnPay’s payroll software can help. Our technology can standardize and automate all of these calculations to ensure everyone is paid the right amount, every time. Best of luck as you streamline operations and our team is here if 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.