Texas Overtime Calculator Guide 2026: Worked Examples, Regular Rate & Tipped Pay

How to calculate overtime pay in Texas — step by step

Because Texas adopts federal FLSA rules without an independent state overtime statute, calculating overtime for non-exempt Texas workers follows five sequential steps for each workweek:

1. Step 1: Determine the Regular Rate of Pay:Establish the employee's true regular hourly rate. Under 29 C.F.R. § 778.109, the regular rate includes base hourly pay plus non-discretionary bonuses, performance commissions, and shift differentials divided by all hours worked. In Texas, the regular rate cannot fall below the statutory baseline of $7.25 per hour.
2. Step 2: Audit Weekly Hours Worked:Sum all physical hours worked within the employer's designated, fixed 7-day workweek. Hours physically worked beyond 40 constitute overtime hours. Paid leave hours (such as PTO, sick leave, or holiday pay) do not count toward the 40-hour overtime baseline.
3. Step 3: Calculate Straight-Time Wages:Multiply the first 40 hours worked by the employee's regular hourly rate. For instance, 40 hours at $20.00/hr yields $800.00 in straight-time pay.
4. Step 4: Compute the Overtime Premium (1.5×):Multiply all hours worked beyond 40 by 1.5 times the regular rate. At $20.00/hr, the overtime rate is $30.00/hr ($20.00 × 1.5). Eight overtime hours produce $240.00 in premium wages.
5. Step 5: Sum Gross Pay and Calculate Deductions:Add straight-time earnings and overtime pay to determine total gross wages ($800.00 + $240.00 = $1,040.00). Deduct federal income taxes and mandatory FICA payroll taxes (6.2% Social Security + 1.45% Medicare). In Texas, state personal income tax withholding is exactly $0.00.

Texas overtime calculation examples

Below are five checked, step-by-step mathematical examples demonstrating how Texas overtime calculations work across various employment situations, including standard hourly schedules, minimum wage jobs, tipped restaurant work, multi-rate blended schedules, and salaried staff:

What is the regular rate of pay in Texas?

Under federal regulation 29 C.F.R. § 778.109 and Texas Labor Code Chapter 62, the regular rate of pay is the weighted hourly rate that forms the legal basis for overtime calculations. It cannot be negotiated away, nor can an employer define it as base hourly pay if non-hourly compensation was earned. The regular rate is determined by dividing total remuneration paid for employment in the workweek (with specific statutory exceptions) by total hours worked.

In Texas, the regular rate cannot fall below the statutory minimum wage baseline of $7.25 per hour. Remuneration items that must be included when determining the regular rate:

• Base Hourly Pay: Standard straight-time pay across all hours worked in the workweek.
• Non-Discretionary Bonuses: Production bonuses, attendance incentives, retention bonuses, and safety awards announced in advance.
• Commissions: All sales commissions earned on goods or services closed during the workweek.
• Shift Differentials & Hazard Pay: Extra hourly premiums paid for working undesirable shifts or hazardous duties.

Federal law permits employers to exclude discretionary bonuses, true holiday gifts, paid leave (vacation, sick, or holiday pay when no work is performed), and bona fide employer contributions to health insurance or retirement plans.

Does Texas have daily overtime?

No, Texas does not have daily overtime. Texas labor statutes contain no requirement for overtime compensation after 8, 10, or 12 hours in a single workday, nor do they require double-time pay. Unlike states like California or Colorado, Texas enforces no daily overtime limits.

Under Texas's FLSA framework:

• An employee who works a 14-hour shift on Tuesday receives straight-time pay for all 14 hours if total weekly hours do not exceed 40.
• Texas law does not require extra premium pay for working on Saturdays, Sundays, or holidays unless those hours push total weekly hours past 40.
• Texas law does not require premium pay for working seven consecutive days in a workweek.
• Healthcare Exception: Under federal FLSA § 207(j), hospitals and residential healthcare facilities may enter into an optional "8-and-80" agreement where overtime is paid after 8 hours in a day or 80 hours in a 14-day pay period.

For a comparison with Florida's $15.00 baseline or California's daily overtime laws, explore our Florida overtime calculator guide and our national overtime pay calculator guide.

Texas overtime for tipped employees

Under the Texas Minimum Wage Act and federal FLSA regulations (29 C.F.R. § 778.207(b)), employers of tipped employees (such as servers, bartenders, and food runners) may claim a tip credit against the $7.25 minimum wage. The maximum tip credit in Texas is $5.12 per hour, requiring the employer to pay a direct cash wage of at least $2.13 per hour ($7.25 − $5.12).

When a tipped employee works overtime, the overtime rate must be calculated on the full $7.25 minimum wage, not on the $2.13 cash wage:

If an employer calculates overtime by multiplying the $2.13 cash wage by 1.5, they pay only $3.20 per hour. This illegal practice shorts the worker by $2.56 per overtime hour ($5.755 − $3.20). Additionally, an employee's total weekly compensation (cash wages plus received tips) must equal at least $7.25 per hour across all hours worked.

Texas overtime for salaried employees

In Texas, receiving an annual salary does not automatically forfeit an employee's right to overtime pay. To be exempt from overtime under the federal FLSA (29 C.F.R. Part 541), an employee must satisfy two distinct legal requirements:

• The Salary-Level Test: The employee must receive a guaranteed predetermined salary of at least $684 per week ($35,568 annually). (The vacated 2024 DOL rule that proposed higher thresholds of $58,656 was struck down in federal court and rolled back by the DOL in May 2026; the valid statutory threshold remains $684 per week).
• The Duties Test: The employee's primary job duties must qualify as executive, administrative, or professional. Simply holding a managerial job title without managing actual business operations or exercising independent judgment does not confer exempt status.

Salaried employees who do not satisfy both requirements are salaried non-exempt. When a salaried non-exempt employee works more than 40 hours in a workweek, their regular hourly rate is calculated as Weekly Salary ÷ 40 hours, and all overtime hours must be compensated at 1.5 times that rate.

Texas overtime pay biweekly — why the week still rules

Many Texas employers pay employees on a biweekly schedule (every two weeks). However, under federal regulation 29 C.F.R. § 778.104, overtime must be calculated strictly on a single 7-day workweek basis. An employer cannot average hours worked across two weeks in a biweekly pay period.

If an employee works 48 hours in Week 1 and 32 hours in Week 2, the total hours worked equal 80 (an average of 40 hours per week). Under Texas and federal law:

• Week 1 (48 hours): The employee is owed 40 hours of straight-time pay plus 8 hours of overtime pay at 1.5×.
• Week 2 (32 hours): The employee is owed 32 hours of straight-time pay.
• Biweekly Total: The worker must receive 72 hours of straight-time wages plus 8 hours of overtime premium pay. Averaging the hours across the two weeks to avoid paying overtime violates the FLSA.

Texas overtime and taxes — no state income tax, and the §225 deduction

Texas workers enjoy a significant paycheck advantage: the state has zero personal income tax. Under Article VIII, Section 24-a of the Texas Constitution, the state cannot levy a personal income tax. In our Texas overtime calculator, the state tax line is always exactly $0.00.

However, overtime earnings in Texas remain subject to federal taxation:

• Federal Income Tax Withholding: Overtime is taxed at standard federal income tax rates. When a large overtime check is issued, payroll systems may temporarily withhold federal income tax at a higher bracket under IRS Publication 15-T rules. Any excess withholding is refunded when filing Form 1040. For a complete breakdown, read our guide on is overtime taxed more.
• FICA Payroll Taxes: Standard mandatory FICA deductions apply to all overtime earnings: 6.2% Social Security (up to statutory annual wage base caps) and 1.45% Medicare (plus 0.9% Additional Medicare on wages exceeding federal thresholds).
• Federal OBBBA § 225 Overtime Tax Deduction (2025–2028): Under the federal One Big Beautiful Bill Act (OBBBA § 225), eligible workers can claim a below-the-line deduction on Schedule 1-A for qualified overtime pay. In Texas, because all statutory overtime represents physical hours worked beyond 40 in a single workweek under the FLSA, Texas's entire 0.5× overtime premium slice qualifies for the federal deduction (up to $12,500 for single filers or $25,000 for married joint filers, subject to MAGI phase-outs). Run your numbers in our overtime tax calculator.