Have a 3500watt water heater on a 20 amp double pole, 12 awg.

If my math is correct 3500watt/220v = 15.90 amp.

This shouldn’t be an issue?

Nope, pretty common actually.

Thing is, your calc is off a bit. “220” is dead. Unless you know for fact that the nominal voltage is 220v, we use a more accurate 240v.

120/240v is nominal these days.

3500w / 240v = 14.58

So Speedy, this setup should be ok?

Also a fixed storage-type water heater that has a capacity of 120 gallons or less shall be considered a continuous load so that would be 14.58 times 125% or a load of 18 amps

yes

Speedy

Should I also calculate the rating a 125%, which would be at 18.22 amps?

Per the NEC

Yes as it is required to be done.

Yup, Mike gave all the pertinent info.

BTW these elements are rated at 240v, so if you really have 220v the watts will just be lower, by a factor of the square of the difference.