Overtime Calculation Example

Overtime Calculation Example

Overtime Calculation Example: Employee works at two different rates during workweek

John Doe worked two assignments for Kelly during one workweek.  The first assignment paid $10.00 per hour for week-ending May 15, 2011. The second assignment paid $15.00 per hour for the same week ending May 15, 2011.  John worked 25 hours on the first assignment and 20 hours on the second assignment for a total of 45 hours.  How much will he be paid for the week?

If 45 hours were worked

Step 1: Calculate total pay for all hours worked at straight time

$250.00 from $10.00 per hour for 25 hours

$300.00 from $15.00 per hour for 20 hours

$550.00 total pay at straight time for all hours worked

The example is designed to demonstrate how overtime is impacted if an employee is working two assignments with different rates

Step 2: Calculate regular rate of pay

Generally, the regular rate includes all payments made by the employer to or on behalf of the employee (except certain statutory exclusions).  The regular rate is determined by adding together the employee’s pay for the workweek and all other earnings and dividing the total by the number of hours the employee worked in that week.

$550.00 straight time earnings divided by 45 hours worked= $12.22 per hour.

$12.22 regular rate of pay includes:

25 hrs x $10.00 = $250.00

20 hrs x $15.00 = $300.00

Total straight time earnings = $550.00

Step 3:  Calculate the overtime premium pay

The straight-time earnings have already been calculated for all hours worked, so the additional amount to be calculated is for each overtime or double time hour worked.

5 OT hrs x .5 OT premium x $12.22 regular rate = $30.55

Step 4:  Add the straight-time earnings and the additional half-time pay

$550.00 straight-time earnings

$30.55 additional half-time earnings

$580.55 total straight-time earnings and overtime pay for week ending 5/15/2011 

Wage Statement Example

  wagestatement