Employers and workers alike need to know figure work hours and overtime. Strictly speaking, you don't calculate these figures; they are listed on a time sheet or time card, and all you do is add them up. The important part is using this information to calculate wages. That can be a little tricky in some cases, since federal law requires that all overtime be paid at 1-1/2 times the regular hourly wage. It's actually not a hard calculation once you know the procedure.
Instructions
1. Add up the total hours worked in a week. Overtime must be figured on a weekly basis, even if the pay period is two weeks or some other length of time. All hours up to 40 in a week are treated as regular time, and all hours over 40/week are counted as overtime, so you have to calculate wages for overtime hours separately.
2. Multiply the regular hours worked (up to 40) by the hourly pay rate. Next, multiply any overtime hours by 1-1/2 times the hourly rate, and add the two amounts to find the weekly wages. For example, if an employee is paid $10/hour and works 45 hours, his pay is 40 hours times $10 (equal to $400) plus five hours times $15 (equaling $75) for a total of $475.
3. Calculate work hours and overtime pay for a tipped employee. Employers can take a credit based on the assumption that a tipped employee makes up the difference from the tips. The exact figures and percentages are subject to change, so refer to IRS Publication 15, Circular E, or to the Department of Labor online information on overtime rules for current figures (see Resources). For regular hours, subtract the tip credit from the wage rate and multiply by hours worked. For overtime, multiply the wage rate by 1-1/2, and only then subtract the tip credit. For example, if a waiter is paid $7/hour with a tip credit of $3/hour, he actually gets $4/hour for the first 40 hours (or $160). If he works 48 hours, multiply the eight hours of overtime by $7.50 (1-1/2 times the $7, minus the $3/hour tip credit) for overtime pay of $60 and total pay of $220.
Tags: hours overtime, hours times, hours worked, calculate wages, hourly rate