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Calculate overtime pay for multiple pay rates (non-weekly pay schedule)

This overtime pay calculation applies to hourly employees that have multiple pay rates and uses a non-weekly (bi-weekly, semi-monthly, or monthly) company pay schedule.

Overtime will be calculated using the highest job rate for hours worked. If you do not work one of your job types during the pay period, this rate will not be considered in the OT calculation. Because Gusto does not collect hours for each week on a non-weekly schedule, this is the most compliant way to calculate OT hours based off of Fair Labor Standard Act (FLSA) requirements.

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 each job rate by the number of job hours worked (overtime hours included), and adding these amounts together. This will give your regular pay amount.

Overtime Pay: Calculate your additional overtime amount by first multiplying the highest worked pay rate by 50% (for regular overtime) or 100% (for double overtime). Multiply this rate by the amount of overtime hours to get the additional 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 as a waiter 60 regular hours biweekly at $15 per hour. He also works as a bartender 20 regular hours biweekly at $12 per hour. He decides to work an additional 10 hours as a bartender in overtime. The following calculation will be used for gross wages:

  1. 60 regular waiter hours x $15 waiter rate = $900 waiter pay
  2. 20 regular bartender hours + 10 OT bartender hours x $12 bartender rate = $360 bartender pay
  3. $900 waiter pay + $360 bartender pay = $1,260 regular pay
  4. $15 highest pay rate x 50% X 10 OT bartender hours = $75 OT pay
  5. $1,260 regular pay $75 OT pay = $1,335 total gross wages