In more detail
Overtime pay is usually regular rate × multiplier × overtime hours, on top of normal pay for the standard hours. Time and a half (1.5×) is the most common multiplier; double time (2×) applies in some places for very long days, rest days or holidays. In the US, federal law requires time and a half after 40 hours in a workweek for non-exempt employees, and some states also count overtime per day. Rules on when overtime applies and who qualifies vary by country and job, and salaried managers are often exempt.
Why it matters
Overtime is normally counted per week, not averaged over a pay period, so a short week does not cancel a long one. Checking a payslip against the rules catches mistakes, and knowing the effective rate helps when weighing extra shifts.
Example
At $20 an hour with overtime after 40 hours:
- 45 hours:
40 × $20 + 5 × $30= $950, an average of $21.11 an hour - Two weeks of 35 and 45 hours in one biweekly pay period:
35 × $20 + $950= $1,650, not the $1,600 you would get by averaging them to 40 hours a week