Overtime pay is calculated at 1.5 times an employee’s regular rate of pay for all hours worked over 40 hours in a work week. The employer defines each work week (Monday through Sunday, or Sunday through Saturday, etc.) and any overtime is calculated by each individual’s work week.
Overtime does not include sick, vacation, personal or holiday time but is based on 40 actual hours worked.
States have different laws regarding overtime. If state laws for overtime differ from federal laws, the option that most benefits the employee is required for use.
To determine overtime, multiply the regular pay rate by 1.5, then multiply by the number of overtime hours worked in order to determine overtime pay due. The overtime due is added to the earnings and is part of total gross wages.
Example: An employee worked 48 hours Sunday through Saturday at a regular rate of $20 per hour.
48 hours @ $20 per hour = $800 earned
Overtime due = $20 x 1.5 = $30 x 8 OT hours = $240
Total gross wages = $800 + $240 = $1040
SurePayroll allows customers to enter multiple rates if they choose.