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Overtime calculator
Overtime calculation formula in excel.
How to calculate overtime pay
There’s more to calculating overtime pay than simply understanding the Fair Labor Standards Act (FLSA), which states that nonexempt, covered employees must receive overtime pay for hours worked in excess of 40 in a workweek at a rate not less than time and one-half their regular rates of pay.
This federal law may sound basic, but once all variables are considered – pay basis (i.e., hourly, salary, piece-rate, commission), flexible schedules, and other forms of compensation (i.e., non-discretionary bonuses, shift pay) – overtime calculations become a bit more complicated.
To make matters even more complex, businesses must comply with not only the FLSA, but also the wage and hour laws in state and local jurisdictions.
When these regulations differ, employers have to apply the overtime pay rate that is most favorable to the employee.
What is overtime pay?
Under the FLSA, overtime pay is additional compensation (i.e., premium pay) that employers must pay to nonexempt employees who work more than 40 hours in a workweek.
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