How To Calculate Overtime Earnings From Hourly Pay Rate - Formula For Calculating Overtime Pay
In this video we discuss how to calculate overtime earnings for employees earning an hourly wage rate. We go through the typical time and a half pay and do a couple of examples.
Transcript/notes (partial)
For hourly paid employees, overtime pay is typically paid at 1.5 times the regular hourly pay rate for any hours worked beyond 40 hours per week. The formula to calculate overtime earnings is, gross overtime earnings equals, their regular hourly rate times 1.5, times the total overtime hours worked.
As an example, let’s say that someone worked 43.5 hours during a given week. Their pay rate is $15 per hour.
Using the formula, we have overtime pay equals $15, their regular hourly rate, times 1.5, times 3.5, their hours of overtime. Calculating out we get $78.75 as their total overtime pay for the week.
And, their total pay for the week would be their regular hourly earnings plus their overtime earnings. Their regular pay is $15 per hour times 40 hours, which equals $600. So, we have $600 plus $78.75, which equals $678.75 in total pay for the week.
Keep in mind that this is gross earnings, and does not take into account any tax or other deductions.
Here are a couple more examples of calculating overtime pay for hourly employees.
Timestamps
0:00 Time and a half overtime pay rate
0:11 Formula for calculating overtime pay
0:21 Example for calculating overtime pay
0:45 How to calculate regular pay and overtime pay
1:06 More examples
