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What is Shift Differential Pay?

Shift differential pay is employees who work shift differential pay receive additional compensation for choosing to work unfavorable shifts like evening or midnight shifts.

The pay a staff member receives for working a shift that falls outside of the usual 8 a.m. to 5 p.m. workday is known as the shift differential.

The shift differential takes into consideration shifts from Monday through Sunday, so weekends are also taken into consideration. In essence, the employee receives a pay raise for working hours outside the typical business day.

This pay increase may persuade employees to accept an unfavorable shift.

Is Shift Differential Included in Overtime Pay?

Yes, all differential shift pay must be included. You’re on the afternoon shift at the office. You work six 8-hour shifts, and you get paid for all hours over 40 in a workweek.

When they forget that every employee working the afternoon shift has their hourly rate increased by $0.50 per hour or a shift differential, that sounds great. 

When determining the rate at which overtime hours are paid, the additional cash received from a shift differential must be added to the hourly rate, also known as the regular rate.

What is the Average Shift Differential Pay?

It all depends on it. The percentage of overtime pay can be between 5% and 15%. 

Hourly workers’ typical shift differential pay in 2023 will be between a flat rate of 50 cents and $1.25 and a percentage (5–15%) of their hourly rate.

The average shift differential pay in 2023 will equal 10% of the role’s hourly wage. 

Companies that pay average shift differential pay to their employees in 2023 will choose the hourly rate based on the annual salary and use it consistently.

Is shift differential included in base pay?

  • Base pay can be specified as a salary or as an hourly rate.
  • Benefits, bonuses, raises, and overtime is all taken into account when calculating annual pay, which prohibits them from base pay calculations.
  • Many salaried workers are not compensated for working overtime.
  • Salary and hourly workers may receive various perks from their employers.

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