Employer overtime cost starts with covered nonexempt hours over 40; Everhour keeps billable and non-billable labor visible.
Calculate regular and overtime earnings based on your hours and rate. Supports standard time-and-a-half and double-time multipliers.
Total hours including overtime
Typically 40h/week
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This calculation answers the employer's wage-cost question: how much must be paid for a covered nonexempt employee's workweek when hours exceed the federal FLSA threshold. Under the federal baseline, covered nonexempt employees must receive overtime pay for hours worked over 40 in a fixed 168-hour workweek at not less than 1.5 times the employee's regular rate of pay.
For an employer, the useful output is not just "overtime hours." You need straight-time earnings, the regular rate, overtime premium, and total wages due for the workweek. That distinction matters when an employee works at multiple rates, earns compensation that belongs in the regular-rate base, or has hours that were worked without advance authorization. If compensable overtime was worked, an authorization policy does not erase the pay obligation.
The regular rate is the calculation base, not always the employee's default hourly rate. For the federal baseline, the regular rate equals total workweek compensation, excluding statutory exclusions, divided by total hours actually worked in that workweek. When an employee works at two or more straight-time rates in one workweek, use the weighted average rate: total earnings from all rates divided by total hours across all jobs.
Example: a covered nonexempt employee works 36 hours at $25 and 12 hours at $35 in one fixed FLSA workweek. Straight-time earnings are $900 plus $420, or $1,320 for 48 hours. The weighted regular rate is $27.50. Because 8 hours are over 40, the employer owes an additional half-time overtime premium of $110, making total FLSA wages due $1,430 for that workweek.
The employer-side mistake is costing overtime before confirming whether the worker is covered and nonexempt. Executive, administrative, and professional exemptions generally require salary or fee pay of at least $684 per week plus the applicable duties test. Job title alone does not determine exempt status. Computer employees can qualify at $684 per week on a salary or fee basis, or at least $27.63 per hour, if the computer-duty requirements are met.
Outside sales employees have no salary-level threshold; that exemption turns on sales duties and being customarily and regularly away from the employer's place of business. Highly compensated employees performing office or non-manual work may be exempt at $107,432 in total annual compensation, including at least $684 per week on a salary or fee basis, if they customarily perform at least one EAP exempt duty.
A one-off calculation is enough when you are checking one closed workweek, one employee, and one set of rates. It is also enough for estimating the wage effect of adding an extra shift before scheduling it. Keep the workweek fixed: the FLSA workweek is seven consecutive 24-hour periods, and employers may not average hours across two or more workweeks to avoid overtime.
A managed workflow is needed when overtime affects project cost, client billing, payroll review, or records retention. Covered employers must keep accurate nonexempt worker records including daily hours, weekly hours, regular rate, and overtime earnings, with payroll records retained for at least three years and wage-computation records for two years. Everhour's billable and non-billable reporting helps separate client-chargeable overtime from internal labor cost.
This content is for general information only, may not be fully up to date, and is provided without any warranty or liability.
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For the federal FLSA wage calculation, include total workweek compensation that belongs in the regular-rate base, total hours actually worked, and overtime hours over 40 for covered nonexempt employees. Separate any internal cost model from the wage calculation. The FLSA result gives the required wage amount; your accounting model can then classify that labor by project, department, client, or billing status.
No. Under the FLSA federal baseline, each fixed 168-hour workweek stands alone. Employers may not average hours across two or more workweeks to avoid overtime. If a covered nonexempt employee works 48 hours in week one and 32 hours in week two, week one still has 8 overtime hours even though the two-week average is 40 hours.
Yes, if the overtime hours were compensable hours actually worked. An employer policy requiring advance authorization does not eliminate the employee's right to overtime pay for compensable overtime hours that were worked. The policy can support scheduling discipline or approval controls, but it does not remove the federal wage obligation for covered nonexempt overtime.
No under the federal baseline. The FLSA does not require overtime pay merely because work occurs on Saturdays, Sundays, holidays, or regular days of rest. The federal trigger is hours worked over 40 in the fixed workweek, unless a more protective state law, employer policy, contract, or representative agreement applies.
Covered employers must keep accurate nonexempt worker records including daily hours, weekly hours, regular rate, and overtime earnings. Payroll records must be retained for at least three years, and wage-computation records must be retained for two years. Those records support the overtime cost calculation, payroll review, and later questions about how the wage amount was produced.
Everhour supports billable and non-billable time through project billing status, task-level non-billable controls, custom task rates, and member-rate exceptions. Admin reports can show billable time, non-billable time, billable amount, and cost, so overtime-related labor can be reviewed without treating every extra hour as client-chargeable.
Everhour Overtimes can calculate overtime hours and overtime pay using daily or weekly limits, 1.5x and 2x tiers, and employee hourly cost. Admins can review overtime in Team Hours and use the Payroll dashboard after the Overtime app is enabled.
Track approved hours, classify billable and non-billable work, and review labor cost by project before payroll. Everhour gives employers cleaner overtime cost visibility.
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