Overtime Pay Calculator: Guide to Compensation
Overtime pay is the additional compensation paid to employees for hours worked beyond their standard working schedule. Labor laws define specific multipliers to ensure employees are fairly compensated for extra efforts.
Key Terms
- Gross Salary: Your total salary before taxes and deductions. Overtime is calculated based on this figure.
- Monthly Working Hours: The standard divisor to find your hourly rate. In many countries (like Turkey), this is legally defined as 225 hours per month.
- Overtime Multiplier: The factor by which your standard hourly rate is increased for overtime work.
- Standard Work Week: The maximum number of regular hours an employee can work before overtime rates apply (e.g., 40 or 45 hours).
How Overtime Pay is Calculated
The calculation typically involves these steps:
- Find the Hourly Rate: Divide your monthly gross salary by your standard monthly working hours.
- Apply the Multiplier: For standard overtime, the hourly rate is usually increased by 50% (1.5x multiplier).
- Holidays and Weekends: Work performed on rest days or public holidays often receives a 100% increase (2.0x multiplier).
Step-by-Step Calculation Example
Suppose an employee with a gross salary of $4,500 works 10 hours of overtime during the week (1.5x rate):
- Standard Hourly Rate:
$4,500 / 225 hours = $20 - Overtime Hourly Rate:
$20 * 1.5 = $30 - Total Overtime Earnings:
$30 * 10 hours = $300 (Gross)
Ensure you are receiving your full entitlement by using our Overtime Pay Calculator Tool for instant and accurate results.