This overtime calculator figures your total overtime paycheck and the OT rate, together with the regular pay by taking account of the number of hours worked. Everything there is to know on how to deal with this calculation is explained below the tool.
How does this overtime calculator work?
This is an application designed to help you keep track of your overtime earnings or estimate your OT rate by considering the following details:
Regular pay rate and the number of normal hours worked (optional).
Overtime multiplier which is offered by the employer. It may be any of these values:
- One time and a half from regular pay rate (1.5) which is most likely as many employers practice this policy;
- Double time which means twice of your standard rate (2);
- Double time and a half which means your normal rate multiplied by 2.5;
- Triple time which indicates that your regular rate multiplied by 3;
- Triple time and a half which means your standard rate is multiplied by 3.5;
- Or can be a quadruple time which is normal pay rate multiplied by 4, or even a customizable value by case (Other).
Overtime hours worked and pay period (both optional).
The algorithm behind this overtime calculator is based on these formulas:
Overtime pay rate: A = RHPR * OVTM
Overtime pay per period: B = A * OVWK
Overtime pay per year: C = B *PAPR
Regular pay per period: D = RHPR * RHWK
Regular pay per year: E = D * PAPR
Total pay per period: F = B + D
Total pay per year: G = C + E
RHPR = Regular hourly pay rate
RHWK = Regular hours worked
OVTM = Overtime multiplier
OVWK = Overtime hours worked
PAPR = Pay period (52 for Weekly, 26 for Bi-Weekly or 12 for Monthly).
Example of a result
In case someone works in a week a number of 40 regular hours at a pay rate of $10/hour, plus an 15 overtime hours paid as double time the following figures will result:
■ Overtime pay rate: $15.00
■ Overtime pay per period: $225.00
■ Overtime pay per year: $11,700.00
■ Regular pay per period: $400.00
■ Regular pay per year: $20,800.00
■ Total pay per period: $625.00
■ Total pay per year: $32,500.00
What is overtime rate?
Often abbreviated as OT, this is a term that describes the extra hours worked in surplus to the official limit of 40 hours per week. As it is considered work in excess, the federal law through the Fair Labour Standards Act states that the employers should pay employees working extra by the regular pay rate multiplied by one and a half.
For instance in case the hourly rate is $10.00 and someone works 4 extra hours over the standard time of 8 hours a day, his daily wage will be:
Regular : $10.00 * 8 = $80.00
Overtime: $10.00*1.5*4 = $15.00 * 4 = $60.00
Daily wage: $80.00 + $60.00 = $140.00.
Depending on the employer and its incentive policy, the overtime multiplier may be greater than the law’s limit, and so there are cases where companies pay double time, 2.5 times the regular pay rate or even triple or quadruple times. Moreover within US, the overtime benefits may depend on the state policy as well, thus to be updated it may be recommended to contact the State Labor Office.
Since this rate depends on the employer’s policy it is as well up to employee’s capacity to negotiate a higher multiplier.
Taking account of the before mentioned aspects this kind of transaction may prove beneficial for both parts:
The employers gain human resource whenever needed without employing occasional HR.
The employers take advantage of its own staff’s knowledge without the need to train and teach new employees.
The employees have the chance for extra income, while the effort to stay overtime may not prove that difficult since the activities performed are generally the same.