An overtime hour at 1.5x gross delivers about 1.36x the net rate of a regular hour
Published 2026-11-09 · updated 2026-11-09 · figures for tax year 2026
Salary is quoted per year and lived per hour. Dividing $75,000 by 2080 hours gives $36.06; dividing the $57,952 that survives gives $27.86. That second number is the one to hold against overtime offers, because overtime is paid in gross and arrives net.
The two hourly rates on every payslip
| Measure | California | Texas | Basis |
|---|---|---|---|
| Gross per hour | $36.06 | $36.06 | $75,000 / 2080 h |
| Net per hour | $27.86 | $29.61 | take-home / 2080 h |
| Overtime, gross | $54.09 | $54.09 | 1.5 × gross hourly |
| Overtime, net | $32.60 | $38.05 | $75,000 → $90,000 increment |
An overtime hour is paid $54.09 gross and delivers $32.60 in California — 60.3% of the gross rate, against 77.3% for a regular hour. Overtime is genuinely worth more per hour, but the "1.5×" label is a gross multiplier: on a net basis the premium is 17.0% rather than 50%.
Why the premium shrinks on the way through
The increment is taxed at the marginal rate, not the average rate. A regular hour sits inside a bucket that is partly taxed at 22.0% or less; an extra hour lands on top of everything else, where the marginal rate is 22.0% federal plus 8.0% state plus FICA. That is why 60.3% survives instead of the 77.3% that the annual average would suggest.
The number of hours nobody counts
$15,000 of extra gross at $54.09 an hour is 277 extra hours — 13.3% of a standard year, or 5.3 hours a week for all 52. The take-home increment is $9,042 in California and $10,553 in Texas. The hourly difference between the states — -$5.45 — is the state tax on that hour, paid on every one of the 277 of them.
How to use it in a decision
Compare the offer against the net hourly rate, not the gross one. $27.86 is what an hour of the current job actually pays in California; an overtime hour at $32.60 is a 17.0% premium on that. If the alternative is a second job at the same gross rate, it will usually pay less per hour than overtime — because a second employer re-withholds from the first dollar, while overtime rides on an already-established wage base.
Figures use the 2026 tables, single filing status, the standard deduction, and 2080 hours a year (40 × 52), which is the convention this site uses everywhere. Actual paid hours are frequently lower, which raises the true hourly rate for the same salary.
Put a number on it
The same mechanisms on an actual salary. Every figure here is computed by the engine that serves the calculators, so it matches the page it opens — nothing is copied.