Overtime Premium Rate Formula

Overtime Premium Rate Formula

Overtime premium rate can be calculated following formula. it is important to remember that overtime premium rate is usually expressed as % of basic rate.

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

Example

Basic rate of wages per hour= 6 $

Premium rate is 70% of the basic wage rate

How much overtime shall be paid for 10 hours?

Solution 

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

 6 (1+ 70%)

= 10.2 $ per hour (Premium Rate)

Amount of overtime = Hr x overtime rate

= 10 x 10.2

=102 (Overtime for 10 hours)