The short answer: no. Under federal law, only hours you actually work count toward the 40-hour overtime threshold. PTO, vacation, sick leave, and holiday pay do not count, even though they appear on your paycheck.
Under the Fair Labor Standards Act (FLSA), overtime is based on hours actually worked, not hours paid. Paid time off of any kind — vacation, sick leave, personal days, holiday pay (when not working), bereavement leave, jury duty pay — does not count as "hours worked" and therefore does not count toward the 40-hour weekly overtime threshold, even though you're paid for that time.
Even though the paycheck shows 44 total paid hours, only 36 were actually worked — under the 40-hour threshold. The PTO hours are paid at the regular rate separately, but they don't push you into overtime.
This corrects a common misconception in the opposite direction: PTO does not "cancel out" or absorb overtime hours. The 40-hour threshold is based purely on hours actually worked. If you worked 42 hours, you earned 2 hours of overtime — the 8 hours of PTO paid alongside it are a separate calculation entirely.
Holiday pay when you have the day off and are simply paid for it is treated the same as any other PTO — it does not count toward the 40-hour threshold.
However, if you actually work on a holiday, those hours are hours worked and do count toward the threshold. If your employer also pays a premium rate for holiday work (e.g., 1.5x or 2x as a company policy), that premium is a separate matter from overtime. In some cases, the holiday premium already paid may equal or exceed what overtime would have required for those same hours — meaning the employer isn't necessarily required to stack additional overtime premium on top of a holiday premium that already meets or exceeds the overtime rate.
For clarity, here's a brief contrast. These do count toward the 40-hour overtime threshold:
These do not count:
Federal law sets the baseline, but employers can voluntarily choose to count PTO toward overtime as a benefit beyond what's legally required. This is uncommon but possible, and would typically be documented in your employee handbook or collective bargaining agreement. Some states may also have different practices. If you're unsure whether your employer counts PTO toward the overtime threshold, check your handbook or ask HR — the answer is specific to your employer's policy and your state's rules.