How is overtime pay calculated?
How you calculate overtime pay depends on whether you are paid by the hour or by a weekly, monthly, or annual salary.
What if I am paid by the hour? If you are paid by the hour, your overtime rate is 1½ times your hourly rate.
What if I am paid by salary? Calculating your overtime rate can be more difficult if you are paid by salary. First, figure out your “regular rate of pay”. Divide your weekly salary by the number of hours you work in a week.
The number you get will equal your “regular rate of pay”. You should then be paid 1½ times that “regular rate” for every hour that you worked over forty hours a week. For example, if your weekly salary is $1,000 and you usually work 40 hours a week, then your “regular rate of pay” is $25 per hour. 1½ times $25 is $37.50, so you should be paid an additional $37.50 for every hour you work over 40 hours. What is a “workweek”? A “workweek” is any seven days in a row that is set by your employer as the workweek.
Your employer can say that the workweek runs from Tuesday through the next Monday, or your employer can say that the workweek runs from Friday through the next Thursday. But your employer probably can’t jiggle the scheduled “workweek” just to keep from paying you overtime. Most workweeks go from Sunday through Saturday, just like regular weeks. So, if you work more than 40 hours between 12 a.m. on Sunday and 11:59 p.m. the next Saturday, you should probably be paid overtime for all of the hours over 40 during that week.