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Calculating Overtime When an Employee Is Paid a Salary - Worked Example

Author: Michael Cardman, XpertHR Legal Editor

It is fairly simple to calculate how much overtime a nonexempt employee is owed when the employee is paid an hourly wage. But calculating overtime becomes a bit more difficult when the employee is paid on a salary basis.

The methods for calculating overtime vary depending on whether the employee's salary is intended to cover a single workweek of 40 hours (see Scenario 1), a single workweek of less than 40 hours (see Scenario 2), a single workweek of more than 40 hours (see Scenario 3) or a period longer than a workweek such as half a month (see Scenario 4) or a full month (see Scenario 5).