Overtime is when an employee works for more than a specified number of hours in a week.
Overtime pay, is the amount paid as compensation for this extra hours worked.
Overtime pay helps employers get the benefit of increased levels of productivity as employees agree to work for longer hours.
Formula to calculate overtime pay.
Usually the overtime rate is one and a half times the normal hourly rate , that is why we multiply by 1.5.
Example:
An employee in a bakery decided to work for extra 4 hours after the work hours were over so as to bake more cakes. The hourly pay rate of the bakery is $15.50. Calculate the overtime pay of the employee.
Therefore, the overtime pay of the employee is $ 93.
