How to calculate overtime pay in 7 steps examples included

This typically happens when you work more than the standard number of hours in a day or week, virtual accountant often beyond 40 hours in a week inmany places. Under federal law, an employee only receives time-and-a-half or overtime pay on a holiday if the hours worked that day exceed 40 for the workweek. Most employees in Pennsylvania must be paid overtime compensation for any hours they work over 40 straight time hours per week. Overtime compensation is 1-1/2 times the employee’s straight time rate of pay.

How Long Does It Take to Get My Money?

For the most part, you only have to pay overtime for nonexempt employees, who are typically hourly workers who earn at least the minimum wage. It’s advisable to investigate the overtime laws of your specific state. At the federal level, overtime is primarily regulated on a weekly basis.

Pay your team

Other exemptions exist, such as those for farmworkers and certain seasonal or recreational businesses. The FLSA narrowly defines exemptions, so employers should refer to the DOL for more specific guidelines. If you usually work a 40-hour week, but one week you do 48 hours, your pay slip may seem a bit more complicated. That’s becauseyou’ll be paid for 40 hours as standard, then you’ll get time and a half on the extra 8.

What is the overtime rate for $17 an hour?

For more additional assistance, check out our free overtime calculator. Independent contractors and freelancers are also ineligible for overtime in most cases. CURT VARONE has more than 40 years of experience in the fire service, including 29 years as a career firefighter with Providence, RI, retiring as a deputy assistant chief (shift commander). He is a practicing attorney who is licensed in Maine and Rhode Island and served as the director of the Public Fire Protection Division at the NFPA.

Example: How does time and a half work for salaried employees

Starting July 1, 2024, most salaried workers who earn less than $844 per week will become eligible for overtime pay. Then, effective January 1, 2025, most salaried workers who make bookkeeping less than $1,128 per week will be eligible for overtime pay. No, overtime pay is taxed at the same rate as your regular wage bracket.

• To add to the confusion, things are different in Massachusetts and Rhode Island, the only two states that oblige private employers to give paid time off onfederal holidays.
• California requires that employees get paid overtime regardless of whether the overtime was approved or not.
• There are exceptions to the above general rule that all payments that are made to an employee must be included in that person’s regular rate.
• It is not valid to sign a “blanket” authorization at the time of hire to cover any future deductions.
• Some employers who provide benefits to full time workers may not provide the same benefits to their part-time or temporary employees.

Start by gathering the hourly rates for all your hourly employees. For example, if you normally pay an employee $25 an hour, this is their normal hourly rate. Employers must also understand that a workweek, according to the FLSA, is seven consecutive 24-hour periods. Therefore, employers may not average an employee’s time worked over two or more workweeks when calculating overtime pay. They generally must pay the overtime earned in a particular workweek on the regular payday for the pay period in which wages were earned. Unions play a significant role in negotiating overtime pay rates on behalf of their members.

The FLSA does not mandate a penny-for-penny or dollar-for-dollar documentation of every reimbursed expense for the exclusion to apply. Rather, an employer must be able to show that the amount paid is “reasonably approximate” to the cost actually incurred by the employee. To find their overtime pay, multiply their regular rate by the hours of overtime they worked and then what is overtime for 18 an hour by time and one-half. If you were not paid at least the minimum wage or you were not paid correctly for your overtime hours, you should try to file a wage claim within two years from the date the work was actually performed.

What is the Difference between Full-Time, Part-time and Temporary Employees?

• ​No, this updated regulation will not change overtime pay calculations for hourly employees.
• If you have borrowed money from a third party, you can give the employer written permission to deduct payments from your earnings.
• CURT VARONE has more than 40 years of experience in the fire service, including 29 years as a career firefighter with Providence, RI, retiring as a deputy assistant chief (shift commander).
• Employees can be scheduled to work up to 40 hours per week as standard scheduling.

In essence, employees who work beyond 40 hours in a single week are entitled to overtime pay. Double overtime pay is like an extra reward for employees who put in additional hours or work on holidays (personal holidays or public holidays). The rules fordouble-time pay can differ depending on the job, the company, and where you live.