How to Calculate Overtime Pay
In the U.S., the Fair Labor Standards Act (FLSA) says that nonexempt workers must get at least 1.5 times their regular pay for any hours over 40 in a week. This rule applies to both hourly and salaried employees, though the calculation depends on how they are paid.
Example
For a salaried employee earning $800 per week for a 40-hour workweek:
- Regular Rate: $800 ÷ 40 = $20/hour
- Overtime Rate: $20 × 1.5 = $30/hour
- Overtime Pay: If the employee works 5 overtime hours, the overtime pay is $30 × 5 = $150.
- Total Pay: $800 + $150 = $950.
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Overtime Pay for Hourly Employees
Under the FLSA, nonexempt hourly employees must be paid overtime for any hours worked over 40 in a week, at 1.5 times their regular hourly rate. For example, if someone earns $10/hour and works 46 hours, their overtime pay is $90 (6 hours × $15). Employers cannot skip or waive overtime, and the regular pay rate includes wages, salary, commissions, and bonuses. Some states, like California, have extra rules, such as overtime after 8 hours in a day. Employers must keep accurate records of hours and pay to follow these laws.
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Overtime Pay for Salaried Employees
To calculate overtime for nonexempt salaried employees, divide their weekly salary by the number of hours the salary covers to find the regular hourly rate. For example, a $1,000 weekly salary for 40 hours equals $25/hour, and overtime is 1.5 times that ($37.50/hour). Some jobs, like executive or professional roles, may be exempt if they meet FLSA criteria. Employers cannot waive overtime, even if the employee agrees, and must pay for all hours over 40 per week. Nonexempt salaried employees are entitled to overtime if they meet these rules.
Formula to Calculate Overtime Pay for Salaried Employees:
\(\text{Overtime Pay} = \frac{\text{Annual Salary}}{\text{Total Annual Hours}} \times \text{Overtime Rate} \times \text{Overtime Hours Worked}\)[ad_2]
FAQ For Overtime Pay Calculator
How do I calculate overtime pay?
Overtime Pay = Hourly Rate × Overtime Multiplier × Overtime Hours Worked.
What is the formula for overtime pay?
Overtime Pay = Regular Hourly Rate × Overtime Rate × Overtime Hours Worked
How is overtime pay calculated for hourly employees?
Multiply the hourly rate by 1.5 (or the applicable overtime rate) and then by the number of overtime hours worked.
What is the standard overtime rate?
The standard overtime rate is typically 1.5 times the regular hourly wage.
What are the FLSA overtime rules?
Under the FLSA, non-exempt employees must receive 1.5× their regular pay for hours worked over 40 in a workweek, with some exemptions.
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