How to Calculate Overtime Percentage the Right Way

Overtime pay is essential for hourly employees who work more than their regular scheduled hours. While overtime regulations vary, most companies pay time-and-a-half for any hours over 40 in a workweek. To calculate what percentage of your hours were overtime, you need to know your total overtime hours for the period and your total regular hours worked.

Follow our step-by-step guide to accurately calculate your overtime percentage each pay period. We’ll also cover overtime pay rates, legal requirements, and how to check your paystub to ensure you get paid properly.

What is Overtime Percentage?

Your overtime percentage represents the portion of total hours worked that were overtime hours. Most companies define overtime as over 40 hours in a 7-day workweek.

To find the percentage, you divide your overtime hours by total hours worked and multiply by 100. This shows overtime as a percentage of total hours.

Here’s the simple formula to calculate overtime percentage

Overtime Hours ÷ Total Hours Worked x 100 = Overtime Percentage

Knowing your overtime percentage each pay period helps you understand what portion of your time is above regular hours, You can also use it to check that your overtime pay is calculated correctly

How Overtime Pay is Calculated

Before calculating your overtime percentage, it’s important to understand how overtime pay is determined:

• Most hourly employees get overtime pay rates for over 40 hours per workweek. Some states like California require overtime over 8 hours per day.

• The overtime pay rate is usually 1.5 times your regular hourly wage. So if you make $20/hour normally, you would get $30/hour for overtime.

• Salaried employees may receive overtime for hours over 40, or may not be eligible for overtime pay depending on job duties and salary level.

• Your employer determines the 7-day period that constitutes a workweek for overtime purposes. It may be Sunday through Saturday, Wednesday through Tuesday, etc.

• Only hours actually worked count toward the 40 hour calculation. Paid leave like vacation and holidays do not apply.

Check with your company’s policies to understand overtime rates and eligibility. Now let’s see how to put this into practice when calculating your percentage.

Step-by-Step Guide to Calculate Overtime Percentage

Follow these steps each pay period to find your overtime percentage:

1. Add Up Total Overtime Hours

First, count the number of overtime hours you worked during the pay period. Refer to your timesheet, payroll records, or app used to track hours.

Be sure to use the total overtime hours paid at the 1.5x overtime rate, not just hours over 40. For example, if you worked 45 hours, you would have 5 overtime hours.

2. Add Up Total Hours Worked

Next, calculate your total hours worked during the pay period. Again refer to a timesheet or hour tracking system.

Include all hours worked, including regular hours (usually under 40) and overtime hours. Do not include paid time off like vacation, sick days, or holidays.

3. Divide Overtime Hours by Total Hours

Take your overtime hours and divide by the total hours you worked:

Overtime hours / Total hours worked

This gives you the portion of hours that were overtime vs. regular.

For example, 45 total hours with 5 overtime hours would be:

5 / 45 = 0.11

4. Multiply by 100 for Percentage

Finally, take the decimal from Step 3 and multiply by 100 to convert to a percentage:

0.11 x 100 = 11%

So 5 overtime hours out of 45 total equals an overtime percentage of 11%.

That’s the basic calculation! Let’s look at some more examples of how to calculate overtime percentage:

• You worked 50 hours total, with 10 overtime hours:

  • 10 / 50 = 0.2
  • 0.2 x 100 = 20% overtime

• You worked 60 hours total, with 25 overtime hours:

  • 25 / 60 = 0.416
  • 0.416 x 100 = 41.6% overtime

• You worked 48 hours total, with 3 overtime hours:

  • 3 / 48 = 0.0625
  • 0.0625 x 100 = 6.25% overtime

Checking Your Overtime Pay on Your Paystub

Once you manually calculate your overtime percentage, you can check that your pay properly reflects it.

Here’s how to confirm you got paid correctly for overtime hours:

• Find your hourly rate on your paystub. This is likely listed as regular pay rate or similar.

• Note the overtime pay rate, which is usually 1.5 times your regular rate.

• Check that your total overtime hours match what you calculated.

• Multiply the overtime hours by the OT rate to see if it matches the overtime pay.

• Divide the overtime pay by your gross pay to calculate the percentage. It should match your manual calculation.

• Look for any discrepancies, like lower overtime pay rates or fewer OT hours than you worked.

Checking your paystub is crucial to ensure you get all overtime pay owed to you. Don’t hesitate to talk to payroll or management if you find any overtime calculation errors.

How Companies Track Overtime

Employers use a few main methods to track overtime hours for hourly employees:

• Timesheets: Employees fill out timesheets listing their hours worked each day. This is common for on-site hourly jobs like manufacturing and retail.

• Time clocks: Companies may have physical punch clocks to timestamp hours worked when clocking in and out.

• Apps and software: Apps allow remote employees or field workers to log hours worked from a smartphone or computer.

• Manager approval: Salaried workers may submit overtime hours for manager approval before pay.

Be sure to record your time accurately using your company’s chosen tracking method. This creates an official record of any overtime hours for proper pay.

State-Specific Overtime Rules

While federal labor laws require overtime over 40 hours, some states have stricter overtime rules:

• California: Overtime is required for over 8 hours per workday or 40 per workweek. Also doubles pay for over 12 hours in a day.

• Alaska, Nevada: Overtime due after 8 hours per day.

• Colorado: Overtime required for over 12 hours per day or 40 per week.

• Maine: Overtime due after 40 hours weekly for most industries.

Check your state’s department of labor website to find specific overtime rules in your location. These can impact how overtime hours and pay are calculated.

Why Overtime Percentage Matters

Paying attention to your overtime percentage each pay period is important for a few reasons:

• It allows you to check your pay to ensure all overtime hours are compensated correctly.

• You can track increases in overtime from month to month, which may signify overwork.

• It helps document overtime worked in case your employer ever tries changing policies.

• Knowing your average overtime percentage can inform future Raises or requests to limit excessive OT.

While doing occasional overtime is expected, consistently high overtime percentages may indicate understaffing or excessive workloads needing addressed.

How to Avoid Excessive Overtime

While some overtime here and there won’t hurt, regularly working extra long days can lead to burnout. Here are some tips to help avoid excessive overtime hours:

• Track your overtime each pay period to identify increases early.

• Have an open discussion with your manager on long hours and possible solutions.

• Ask for reasonable accommodations like flexible scheduling if overtime triggers health issues.

• Request to hire additional staff if overtime stems from understaffing.

• Improve time management skills and productivity to maximize regular hours.

• If excessive hours continue, look for jobs with better work-life balance.

Your time and mental health are invaluable, so don’t be afraid to speak up on consistent overtime concerns.

Key Takeaways on Calculating Overtime Percentage

• Overtime percentage is your overtime hours divided by total hours worked, multiplied by 100.

• Check your paystub overtime hours and pay rate match your calculations.

• Overtime of over 40 hours weekly is required under federal law; some states have stricter rules.

• Consistently high overtime percentages may signify overwork issues to address.

• Accurately tracking your overtime percentage each pay period helps ensure proper pay for extra hours.

Knowing how to calculate your overtime percentage is key to getting all owed overtime pay as an hourly worker. Use our guide to easily find this important percentage each pay period.