Overtime Pay Calculation

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Overtime Pay Calculation Overview

Overtime pay is a pay premium of 50% of the regular rate of pay that is earned by employees on all hours worked beyond 40 hours in a standard work week. This calculation can vary for individual states, so be sure to check with the local state agency that tracks wage law issues to see if there are variations from the federally-mandated rule.

When calculating overtime, the employer does not have to include in the 40 base hours such special hours as vacations, holidays, sick time, or jury duty.

Overtime Pay Calculation Example

Ahmad Nefret is a welder who works 47 hours during a standard work week at an hourly wage of $22.00 per hour. The overtime premium he will be paid is 50% of his hourly wage, or $11.00. The calculation of his total pay is as follows:

47 hours x regular pay rate of $22.00/hour = $1,034.00

7 hours x overtime premium of $11.00/hour = 77.00

Total pay = $1,111.00

As another example, Jamie Hildebrandt worked 33 hours during the four-day work week following Labor Day. Though her employer will pay her for 41 hours worked (eight hours of holiday time plus 33 hours worked), there will be no overtime paid out, since eight of the hours were not actually worked.