Business Mathematics: Payroll - Overtime

Overtime generally refers to the hours worked in excess of 8 in 1 day or 40 in 1 week. For example, if John worked 10 hours yesterday he will be paid overtime for 2 hours (10 - 8 = 2). If Mary worked 43 hours last week, she will be paid overtime for 3 hours (43 – 40 = 3).

Overtime pay is usually l½ times the regular hourly rate. This overtime rate is called time-and-a- half. For example, if your hourly rate is $6, then your overtime rate is 1.5 × $6 = $9 per hour. Work on Sundays or legal holidays is usually paid for at 2 times the regular hourly rate. This rate is called double time. Therefore, for an hourly rate of $6, the overtime rate for work on Sundays or holidays is 2 × $6 = $12/h.

Solved Problems

3.15   Ryan Don’s time card shows the following hours worked:

His hourly rate is $6.50 plus time-and-a-half for any hours worked over 40 per week. Determine (a) his total hours worked and (b) his gross pay.
Solution

(b) The gross pay in this instance is the sum of Ryan’s regular pay and his overtime pay. We determine the regular pay as follows:

To calculate overtime pay, we must first determine the overtime hours worked and the hourly rate for working overtime.

The overtime pay then is

Ryan Don’s gross pay for the week is


3.16   Heather Borod worked the following hours during the week:

Calculate her gross pay at an hourly rate of $6.00 plus time-and-a-half for any work hours over 40 per week.
Solution

* Overtime hours: 42.5 – 40 = 2.5
Overtime rate: 1.5 × $6 = $91

3.17   On Monday, Wednesday, and Friday, Matthew Cirrus worked 10 hours each day. On Tuesday and Thursday he worked 5 hours each day. His hourly rate is $6.70 plus time-and-a-half for any hours worked in excess of 8 per day. What is his gross pay?
Solution


3.18   At Bullfrog Corp. the employees are paid an hourly rate of $6.50 plus time-and-a-half for any hours worked over 8 per day. Find the gross pay for Rene Wren when her time card shows the following:

Solution

* Regular hours = total hours - overtime hours
= 41 - 3 = 38
Overtime hours: 1 (Mon.) + 2 (Thurs.) = 3
† Overtime rate: $6.50 × 1.5 = $9.75

3.19  Sylvia Braufman worked 46 hours last week at an hourly rate of $8.40 plus time-and-a-half for working over 40 hours per week. What is her gross pay?
Solution

* Overtime rate: $8.40 × 1.5 = $12.60

3.20   Calculate the gross pay of Harry Rogers. His time card for the week ending February 11 shows hours worked. His rate of pay is $11 per hour plus time-and-a-half for any hours over 40.
Solution

* Overtime rate: $11 × 1.5 = $16.50

3.21   Francesca Johnson worked the following hours:

Find her gross pay if she is paid $6.75 per hour plus time-and-a-half for hours in excess of 40 and double time for any hours worked on Sunday.
Solution

* Overtime rates: $6.75 × 1.5 = $10,125 for weekdays
  $6.75 × 2 = $13.50 for Sundays