Overtime pay is one of the most common sources of confusion for employees and employers in Arizona. If you’ve worked more than 40 hours in a week, you’re entitled to extra pay—but exactly how is it calculated? This guide explains Arizona’s overtime rules, step-by-step formulas, and real examples so you can check your paycheck with confidence.
Quick Overtime Formula
- Overtime rate = Regular hourly rate × 1.5
- Overtime pay = Overtime rate × Overtime hours worked
Arizona follows federal Fair Labor Standards Act (FLSA) rules, which require overtime after 40 hours in a workweek.
When Does Overtime Apply in Arizona?
- After 40 hours in a workweek (not after 8 hours in a day).
- Applies to non-exempt employees (hourly and some salaried workers).
- Exempt employees (executives, certain professionals, outside sales) are not entitled to overtime.
- Arizona’s minimum wage in 2025 is $14.35/hour, so that is the lowest base rate used for overtime calculations.
Step 1: Find Your Regular Rate
Hourly Employees
Your regular rate is your hourly wage.
Example: $20/hour
Salaried Non-Exempt Employees
Divide annual salary by 52 weeks, then by 40 hours.
Example: $52,000 ÷ 52 ÷ 40 = $25/hour
Commission or Piece-Rate Employees
Add total weekly pay, including commissions, then divide by total hours worked.
Step 2: Calculate the Overtime Rate
The overtime rate is 1.5 times the regular rate.
- $20/hour → $30/hour overtime
- $25/hour → $37.50/hour overtime
Step 3: Multiply by Overtime Hours
Example 1: Hourly worker at $20/hr, 10 overtime hours
- Regular: $20 × 40 = $800
- Overtime: $30 × 10 = $300
- Total = $1,100 gross for the week
Example 2: Salaried non-exempt at $25/hr, 5 overtime hours
- Regular salary covers 40 hours
- Overtime: $37.50 × 5 = $187.50
- Total = $1,187.50 gross for the week
Special Scenarios in Arizona
Tipped Employees
Overtime is based on the full minimum wage, not just the reduced tipped wage. Employers must ensure tipped workers earn at least $14.35 × 1.5 = $21.53/hour for overtime.
Commission Workers
Overtime must include commissions. Example: $600 total earnings ÷ 50 hours = $12/hour regular rate → $18/hour overtime.
Bonuses and Differentials
Non-discretionary bonuses and shift differentials are added into the “regular rate” before calculating overtime.
For more paycheck clarity, compare with tools like a land loan payment calculator or a land loan repayment schedule calculator. Both use the same principle—breaking down large amounts into smaller, trackable numbers.
Taxes on Overtime Pay in Arizona
Overtime pay is taxed the same as regular pay:
- Federal income tax (based on your W-4).
- FICA: Social Security 6.2% + Medicare 1.45%.
- Arizona flat state tax: 2.5% in 2025 (adjustable via Form A-4).
Gross vs Net Example with Overtime
| Worker | Regular Pay | Overtime Pay | Gross Pay | Net Pay (approx.) |
|---|---|---|---|---|
| $20/hr, 50 hrs | $800 | $300 | $1,100 | $875–$890 |
Net pay depends on federal withholding, Form A-4 selection, and pre-tax deductions.
Common Mistakes Employers Make
- Misclassifying salaried workers as exempt when they are not.
- Forgetting to include bonuses or commissions in the regular rate.
- Paying overtime after 8 hours in a day instead of 40 in a week.
- Not paying tipped employees the correct overtime rate.
FAQs About Overtime in Arizona
What is the overtime pay rate in Arizona?
1.5 times your regular hourly rate after 40 hours in a week.
Do salaried employees get overtime?
Only if classified as non-exempt under FLSA.
Does Arizona require double time?
No, only 1.5× overtime is required.
Is overtime taxed more heavily?
No, it’s added to gross income and taxed at normal rates.
What is Arizona’s minimum overtime wage?
$21.53/hour in 2025 (1.5 × $14.35 minimum wage).
Harry is the creator of ArizonaPaycheckCalculator.com, a trusted resource for accurate and easy-to-use payroll and tax calculators. With a focus on clarity and precision, Harry helps Arizona residents understand their take-home pay, deductions, and withholdings. Dedicated to making complex calculations simple, he combines financial knowledge with user-friendly tools to save users time and confusion.