Calculate Overtime From the Regular Rate
Calculate overtime premium from regular rate inputs rather than base rate alone.
Andre worked 46 hours at $20/hour and earned a $120 nondiscretionary production bonus in the same workweek. Regular rate = includable straight-time compensation divided by total hours; overtime premium must reflect that rate. Using the base hourly rate alone misses includable bonus pay and underpays overtime premium. 1. Straight-time wages 46 hours x $20 = $920 This is the number Payroll should verify against source records before moving to the next step. Start with all hours paid at base rate. The reasoning matters because this step changes either taxable wages, gross pay, net pay, or the audit trail. 2. Add…
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