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What is Overtime Pay?


Overtime pay is the additional payment paid to the eligible employee for working more than the desired working hours in a work week. It is a premium price granted to employees who work beyond the working hours set by their employers.


How Much is Overtime Pay?


According to the Fair Labor Standards Act (FLSA), overtime pay is calculated by multiplying the non-exempt employee’s regular pay rate by 1.5 times the number of overtime hours worked.


Who is Exempt from Overtime Pay?


Exempt workers in the United States cannot obtain overtime compensation from their employers, even though they may otherwise be eligible for it under the Fair Labour Standards Act (FLSA). Some people who are paid a salary nonetheless qualify for overtime pay, even though they are frequently excused from it in professions like sales, executive management, and administration.


Generally, overtime pay is exempted for the following employees:


  • Salaried Exempted Employees
  • Highly Rewarded Employees
  • Professionals in Computers
  • Agricultural Workers
  • Salesperson


How is Overtime Pay Calculated?


Calculating overtime pay involves determining the reward payment that an eligible employee receives for working overtime in a work week.


The basic steps that you can use to determine the overtime pay for an employee who works more than 40 hours in a workweek is shown below:


  • Determine the standard hourly rate before overtime.
  • Add 1.5 times the hourly wage.
  • Increase the number of overtime hours.
  • Boost the rewarded amount from regular hours by the outcome.


Also, See: Double Time Pay

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