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Calculate overtime pay with one pay rate

The rate used for overtime pay varies depending on your payroll schedule and how many pay rates you have. This overtime pay calculation applies to all hourly employees who have only one pay rate. However, ultimately how you choose to calculate overtime pay is up to you and you should consult your CPA with questions.

Calculating gross wages with overtime

Regular Pay: First multiply your regular hours (overtime hours not included) worked by your regular pay rate to get your regular pay.

Overtime Pay: Calculate the overtime rate by first multiplying your regular pay rate by 1.5 (for regular overtime) or 2 (for double overtime). Multiply this overtime rate by the amount of overtime hours to get the overtime pay

Gross Wages: Adding the overtime pay with your regular pay will give your total gross wages for the pay period.

Example

Your employee works 40 regular hours a week at $20 per hour. She decides to work an additional 10 hours in overtime. The following calculation will be used for gross wages:

  • 40 regular hours x $20 regular pay rate = $800 regular pay
  • 10 regular OT hours x ($20 regular pay rate x 1.5) = $300 OT pay
  • $800 regular pay + $300 regular OT pay = $1,100 total gross wages