Overtime Premium Pay Explained: Holiday, Sunday & OT Premiums (2026)

The Short Answer

Overtime premium pay is the extra money above your straight-time wage for overtime hours. At time and a half, the premium is the "half" — 0.5 × your regular rate for each overtime hour. Holiday and Sunday premiums are different: federal law does not require them, but when an employer pays them, they can affect how overtime is calculated.

Premium vs Full Overtime Pay

| Term | At $20/hour | Meaning |

| --- | --- | --- |

| Straight-time rate | $20 | Pay for every hour worked |

| Overtime premium | $10 | The extra half for each overtime hour |

| Full overtime rate | $30 | Straight time + premium |

Pay stubs often show "OT premium" or "half-time" when straight time for all hours is listed separately. Both methods reach the same total if done correctly.

Holiday Premium Pay

Federal law does not require extra pay for working a holiday. Many employers still pay 1.5× or 2× on holidays. Under the FLSA:

• If the holiday premium is at least 1.5× the normal rate, it can be excluded from the regular rate and credited toward overtime owed that week.
• The hours worked on the holiday still count toward 40.
• Paid holidays you do *not* work are not hours worked and do not count toward 40 under federal law.

Try it in the holiday overtime calculator or read holiday pay laws by state.

Sunday and Weekend Premiums

A Sunday or Saturday premium works like a holiday premium when it is at least 1.5× and paid for work on days that are not part of the regular workweek schedule. A small flat weekend bonus (for example $2 extra per hour) is instead a shift differential and goes into the regular rate. See does shift differential count for overtime.

Worked Example

$20/hour, 48 hours in the week, 8 of them worked on a holiday paid at 1.5× ($30).

| Line | Amount |

| --- | --- |

| 40 non-holiday hours × $20 | $800 |

| 8 holiday hours × $30 | $240 |

| Gross week | $1,040 |

The 8 holiday hours were paid at 1.5×, and that premium is credited against the 8 overtime hours, so nothing more is owed federally. That matches what ordinary time and a half would have produced, so the same hours are never paid a premium twice.

Quick Answers

Is holiday pay the same as overtime? No. Holiday premiums are optional under federal law; overtime after 40 hours is required.

Can holiday premiums reduce my overtime? Qualifying premiums of at least 1.5× can be credited toward overtime owed in the same workweek.

Does California treat this differently? California daily and seventh-day rules add separate requirements. Use the California double time calculator.

Calculate your week with the free overtime calculator or the double time calculator.