How overtime pay is calculated
Separate regular hours from overtime hours, then apply the multiplier your policy actually uses.
Short answer
Pay the base rate for regular hours. Pay base times the multiplier for overtime hours. Add the two amounts. The multiplier is a policy question before it is a math question.
Do the classification first
The calculator will not decide which hours are overtime. A common US federal rule is time and a half after 40 hours in a workweek for nonexempt employees covered by the Fair Labor Standards Act. Some jobs are exempt. Some states and contracts are more generous. Read the rule that applies, then enter hours that already match it.
Once the hours are split, regular pay is rate times regular hours. Overtime pay is rate times multiplier times overtime hours. At a multiplier of 1.5 you do not add the base a second time. The 1.5 already means one part base and one half-part premium.
Common mistakes
- Calculating the premium as an extra 1.5 on top of a full base payment for the same hour.
Frequently asked questions
- What if the regular rate includes a bonus?
- Federal overtime can require a regular rate that includes certain bonuses. This guide does not reconstruct that rate. Use the rate your payroll already determined, or ask payroll.
Related
- Overtime payAdd regular hours and overtime hours from an hourly rate and a multiplier such as time and a half.
- What time and a half meansTime and a half is 1.5 times the regular hourly rate for the hours your rule marks as overtime.
- Annual salary to hourly rateConvert an annual salary into an hourly rate from the hours you actually work in a week and a year.
Sources
- Overtime pay — U.S. Department of Labor