Overtime Premium Rate Example

Overtime Premium Rate Example

Overtime premium rate is rate used to calculate the labour overtime. Such rate is usually more than basic rate and expressed as percentage of basic rate. This concept has been explained with an example

Overtime Premium Rate=Basic Rate (1+ % of basic Rate)

Example

Labour Basic Rate applicable in the company= 8 $

Premium is to be paid @ 50% of basic pay

What would be the premium rate & overtime, assume overtime hours are 30.

Solution

Overtime Premium Rate=Basic Rate (1+ % of basic Rate)

 8 (1+ 50%)

= 12 $ (Rate of overtime Premium)

Amount of overtime = Hr x overtime rate

= 30 Hrs x 12

=360 (Amount of overtime)