how to calculate overtime pay

All posts tagged how to calculate overtime pay


There are actually two kinds of employee types. The first is exempt and the second one is nonexempt. This kind of classification actually refers to what the employee exempts from the overtime wage or not. So, you should pay overtime wages to your nonexempt employees and you also need to know how to calculate overtime pay. You don’t get to choose the employee classification.  And, paying the employee salary doesn’t automatically make them an exempt from overtime wages.

And here are two ways on how to calculate overtime pay for the salaried employees. The first way is that when the employees receive the salary which covers fixed numbers of the worked hours. And the second way is when the employees receive the salary which covers the wall worked hours. Those two ways are actually quite similar. But they have different outcome on the wages of the employees. But now, we’re going to discuss only one way of calculating the overtime pay for your salaried employees. The first way is very easy and no need to think a lot on how to practice it. Are you ready? Here we go.

The Overtime Wages for Salary with the Fixed Hours


As the example, let’s make it like your employee get $500 for each week. And you expect the employee work more or less 36 hours for one week. But, in this week, she or he only works, let’s say 50 hours. So, here are some steps on how to calculate overtime pay with fixed hours.

1 ) Calculate regular hourly rates.

It can be done by dividing the weekly salaries by the hour numbers that you expect that employee to work. So, in this example, it is $500/ 36 hours. So, the result is $13.89/ hour.

2 ) Calculating the regular wages until 40 hours

According to the FLSA rules, overtime pay starts from 40 hours which is worked in one week. So, you need to calculate the regular wages of the employees that uses regular hour rates. If you actually expect your employee working 40 hours one week, you could skip this step. For example, you can calculate 40 x $13.89. And the result is $555.60 total the regular wages.

3 ) Calculate overtime hourly rates

Commonly, overtime rates are time and a half. So, you need to multiply regular hour rates by 1 and a half. This is the example: $13.89 x 1.5. And the result is $20.84/hour.

4 ) Calculate overtime wages

You can multiply overtime hourly rates by the numbers of the extra hours that the employees have worked. For example, $20.84×10 overtime hour. The result is $208.40 total of the overtime wages.

5 ) Calculate total wages

The last step is adding together total regular wages as well as the total overtime wage. For example, you calculate $555.60 + $208.40. The result is $764 total wage for that week.

Those are some simple and easy to do steps when you want to calculate the overtime wages for your salaried employee. The steps are simple and you can even practice them right now to your employee. So, how to calculate overtime pay? Are you still confused? Hopefully not and hopefully those steps help you.

Description: How to calculate overtime pay for salaried employees can be done in two ways or two methods. The first one above is based on the fixed hours when your employees have worked.