Include a nondiscretionary bonus or other pay in the regular rate, and see the correct overtime for the week.
Straight-time pay = hourly rate × all hours + includable pay.
Regular rate = straight-time pay ÷ all hours.
Overtime premium = 0.5 × regular rate × hours over 40.
A warehouse worker earns $18 an hour, works 46 hours and receives a $92 weekly production bonus. Straight-time pay is $920, the regular rate is $20.00, and the overtime premium is $60 for 6 hours. Total pay is $980, not the $974 paid if the bonus is left out of the overtime math.
Under federal rules, overtime is based on the regular rate, which includes most pay such as shift differentials and nondiscretionary bonuses, not only the hourly wage. Leaving them out is a common payroll error.
Some payments, such as discretionary bonuses and certain reimbursements, are excluded. Check what applies to each payment.
A night shift packer earns $16 an hour, works 52 hours and earns $120 in shift differential for the week. Straight-time pay is $16 x 52 + $120 = $952.00, and the regular rate is $18.31. The overtime premium for 12 hours is half the regular rate times 12, $109.85, so total pay is $1,061.85.
Straight-time pay already covers every hour, overtime hours included, at base pay plus extra pay, which is why only a half-time premium is added on top. The result is misleading if the extra pay covers more than one week, or if you include amounts that are excluded, such as true gifts or expense reimbursements. States with daily overtime need their own calculation on top of this weekly one.
Most pay for work, including nondiscretionary bonuses and differentials.
Some payments such as discretionary bonuses and certain reimbursements.
Straight time is already paid for all hours; overtime adds the half.
It is allocated back to those weeks.
Yes, shift differentials are generally included. Add the week’s total differential pay to other includable pay, and the calculator spreads it across all hours worked.
No. Pay for hours not worked, such as a paid holiday off, vacation or sick pay, is generally excluded. Leave it out of other includable pay and leave those hours out of hours worked.
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Instead of adding up timesheets before you open the regular rate of pay calculator, let EZTime total employee hours. Book a demo to see it with your team.