How To Compute Overtime Pay ?
Overtime pay is mostly given to non exempt employees, and it is calculated based on the FLSA or the Fair Labor Standards Act. Sometimes, it can be confusing for the employers to compute overtime pay. |
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According to the Act, overtime is calculated by taking the employers standard time rate of pay, multiplying it with exact number of hours worked beyond the regular agreed hours, then adding one half of the employees pay per hour and then dividing it with the total pay. This can sound extremely confusing, but it is quite simple actually.
Usually when overtime pay is paid, it is usually around one and half times the pay that the person receives each hour. For instance, a person is paid ten dollars an hour, he or she will receive fifteen dollars as overtime pay.
However, there are certain states in the US that have their own rate when it comes to paying overtime pay. Also, certain jobs do not qualify for overtime pay. In order to figure out these jobs, it is best to check with your state's employment office.
In case a person does not receive his wages based on the hour, then his or her weekly or monthly salary is converted into hourly basis to calculate the amount a person will receive in overtime pay. In this case, the total number of hours that the person worked for the week is taken, and then the weekly payment is divided by the same to get a rate for each hour. Also, when a salaried person has an contract with the employer to work different hours each week depending on the workload, then the overtime amount paid for each will vary.
Therefore, a person who draws a monthly salary will be able to compute overtime pay by take the salary amount, dividing it by twelve and then dividing the result by 52. This will give the weekly rate. Once the weekly rate is determined, the hourly rate can be gotten by dividing the resultant figure by the hours worked in the week. The person will then be entitled to one and half times the amount for each additional hour worked beyond the prescribed and agreed hours.
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How To Compute Overtime Pay ?
