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# Time and a Half Definition and how to calculate it Sage Advice US

August 20, 2024
Bill Kimball

In essence, time and a half is a term related to overtime pay. It refers to the extra payment that you owe to your employees for any hours they have worked above the 40-hour week. The standard overtime pay is time and a half the regular hourly payment. Time and a half refers to a 50% increase in an employee’s regular hourly pay rate received from an employer for overtime hours worked. As usual, add together the employee’s overtime and regular wages to get their total gross pay for the period. Let’s say you have a nonexempt hourly employee who earns \$12 per hour.

## Calculating overtime for hourly employees

1. If you receive an hourly wage of \$17 per hour, your time and a half overtime pay will equate to \$25.50 per hour (\$17 × 1.5).
2. She has worked 45 hours this week, so she has 5 overtime hours.
3. Time and a half refers to a 50% increase in an employee’s regular hourly pay rate received from an employer for overtime hours worked.
4. In Alaska, California, and Nevada, a person who works more than eight hours in a day is entitled to overtime for any additional time.

How you calculate overtime wages, however, differs between the hourly and salaried workers on your team. Enter the required values into the calulator and click on “Calculate” to find the employee’s overtime pay rate. To add to the confusion, things are different in Massachusetts and Rhode Island, the only two states that oblige private employers to give paid time off onfederal holidays. In Massachusetts, this law also applies to some state holidays. As we mentioned, once a nonexempt employee hits the certain threshold of over 40 working hours a week, you have to pay them time and a half.

## How to Use the Time and a Half Calculator?

A good chunk of nonexempt employees receive hourly wages instead of a salary. However, because nonexempt employees can be salaried, you must know how to calculate time and a half for both salaried and hourly employees. Time and a half is the pay rate that employers must give hourly workers for overtime hours worked beyond the typical work schedule. It means paying an employee one and a half times their regular hourly wage. Overtime and holiday pay are taxed the same as regular hourly wages.

## Time and a Half Calculator

For every hour of overtime an employee works, you must give them their regular rate of pay plus half of that. To calculate an employee’s overtime rate of pay, multiply their regular rate by 1.5. Sometimes employers also offer double pay for extra hours, especially during the holiday. The double pay rate actually doubles the standard rate of the employees. It is easy to calculate the double time salary by multiplying the regular standard rate with “2”.

## Stay up to date on the latest payroll tips and training

The federal government has not introduced any legislature on the subject of holiday pay. If you work Saturdays, Sundays, or holidays, you’re not legallyentitled to any special pay. Despite the lack of any legal requirement, holiday pay is commonly offered by most employers, to incentivize workers and keepthem happy. So if you have an employee who is making a flat \$700 a week and they normally work 35 hours per week, you would divide \$700 by 35 for their hourly rate. Multiply your employee’s overtime hours (8 hours) by their overtime hourly rate (\$10.42).

## Pros of Payroll Software

Moreover, a strong reputation for fair labor practices can enhance the company’s standing in the community and industry, which can be beneficial for business growth and networking. We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent, a Motley Fool service, does not cover all offers on the market. Taking care of employee payroll is essential for running a successful business, and this means understanding the industry jargon inside out. That’s why knowing the answer to the question, “What is time and a half?

He worked one extra hour from Monday to Thursday and two extra hours on Friday. This means he has worked 6 hours over the standard 40 hours per week. Calculating time and a half pay for hourly employees is the easiest case.

Some states or individual companies might have policies that offer enhanced pay for weekend work, but it is not mandated by federal law. When you opt to pay time and a half to an exempt employee, you need to convert that person’s annual earnings to an equivalent hourly rate. From there, you calculate the time and a half rate the same as an hourly employee. Tina worked fewer than 40 hours last week, so none of her pay is subject to overtime. Austin and Sophie are entitled to overtime pay on their hours over 40.

Although this can make an impact on your overheads, it’s a great way to show your employees that you value their time and incentivize hard work. Time and a half is, as the name suggests, 50% more than the employee’s regular rate of pay. So for every hour of overtime that an employee works, you have to pay them their regular rate plus a half on top of that. If you run a business and have nonexempt employees, once they have worked over 40 hours during the workweek you have to pay them overtime. First things first, you need to find the employee’s regular hourly rate. Divide the employee’s salary by the number of hours you expected the employee to work (34 hours).

During the last workweek, the employee worked 45 hours (40 regular hours + 5 overtime hours). If you have nonexempt employees, you must pay them time and a half (1.5 times) for any hours worked over 40 a week. Paying time and a half is not just a good practice—it’s a legal requirement under the Fair Labor Standards Act (FLSA) for non-exempt employees. By adhering to these regulations, employers avoid potential lawsuits and costly legal disputes that can arise from wage and hour violations. It’s part of the payroll process to keep track of the number of hours each employee works. When you pay overtime, time and a half is the minimum overtime pay rate allowed in the United States.

According to the FLSA, it should be at least one and a half times their regular hourly wage. Calculate the employee’s regular hourly rate by dividing the weekly salary by the total number of hours worked. The FLSA sets the standard for wages and hours worked, mandating that non-exempt employees receive at least time and a half for any hours worked over 40 in a single work week.

Let’s calculate their gross pay, which is their earnings before taxes. The DOL periodically changes the FLSA minimum for exempt employees, meaning some previously exempt positions no longer qualify. Monitor positions that pay around \$684 weekly to make sure you’re not falling out of compliance.

This time and a half calculator is used to calculate your overtime or holiday pay on the basis of a standard hourly rate. The calculator takes your standard weekly, bi-weekly, semi-monthly, and monthly pay figure and determines the overtime pay at 1.5 times your regular rate. There’s a common misconception that paying an employee a salary means they’re exempt from overtime wages.

It can be challenging for business owners to determine when and how to pay time and a half to their staff. Hourly can be your trusted partner in tracking your team’s work hours, handling workers’ comp, and keeping compliant payroll records. How you calculate time and a half pay for salaried employees depends on the type of salary that they receive. In retail, employees require a police permit and state approval to work on Christmas, Columbus Day,Thanksgiving, and Veteran’s Day.

Finally, add together the salaried employee’s regular and overtime wages to get their total gross pay for the period. Next, find the employee’s overtime rate by multiplying their regular hourly rate by 1.5. These bonuses are awarded at the discretion of the employer without prior promise or expectation set for the employee. Common examples include holiday bonuses or bonuses as a reward for exceptional performance, where the amount and existence of the bonus were not promised in advance. Discretionary bonuses do not need to be included in the regular rate of pay used to calculate overtime. Paying an overtime rate on top of an employee’s regular rate obviously means you’ll be paying more.

FreshBooks is accounting software that provides accounting solutions for small business owners. A job duty that would be considered exempt would include high-level responsibilities that affect the overall company operations. This could be executive, administrative or computer-based duties for example. Enjoy less admin, more automation, simplified payroll, and get paid faster with Sage 50cloud. From process to people, take a peek at the paradoxes facing HR leaders today by downloading this research report. Overtime pay policies vary between companies, with time and a half being a common rate in many industries, including retail, care work, and construction.

For example, let’s say a salaried employee who earns \$52,000 per year makes \$1,000 per week (\$52,000 ÷ 52 weeks). When you divide weekly earnings by a standard 40-hour work week, you get the equivalent hourly rate of \$25 per hour. Calculating the gross pay for salaried employees who work a different number of hours from week to week requires a different approach. Their standard hourly pay rate will differ, depending on how many hours they have worked in a particular week. In the public sector, employees are given 13 annual national holidays off, with pay. Every company can set itsown holiday policy, but there are some common trends.