How to Calculate Time and a Half: A Complete Guide with Examples

If your organization employs hourly workers, running payroll requires a detailed understanding of how PTO, seasonal holidays, and more factor into their paychecks.  

You want your employees to be paid correctly and on time, and as your organization grows, it gets harder to track all of the different variables that affect payroll—like overtime.  

If any of your employees work overtime, then you likely owe them time and a half. But what is time and a half, and how do you calculate it?  

What Is Time and a Half?

Time and a half is the amount your employee is paid hourly, plus half that amount for each hour worked overtime. The Fair Labor Standards Act determines overtime pay requirements that overtime may not be less than time and a half an employee’s hourly rate. This ruling was passed to ensure organizations appropriately compensate employees that worked more than the set standard of 40 hours per week.  

According to the U.S. Department of Labor, “Unless exempt, employees covered by the Act must receive overtime pay for hours worked over 40 in a workweek at a rate not less than time and one-half their regular rates of pay.” 

It is important to note that overtime applies on a workweek basis. The workweek is seven consecutive 24-hour days. So if an employee’s workweek runs from Tuesday to Tuesday, overtime is anything over 40 hours within that 168-hour span.  

Employees can have different workweeks compared to one another, and “overtime pay earned in a particular workweek must be paid on the regular payday for the pay period in which the wages were earned.” 

When calculating overtime pay, use this formula: 

Time and a Half = Standard Hourly Rate x 1.5 

While using this formula is straightforward for hourly employees, salaried employees are trickier to calculate. 

How to Calculate Time and a Half for Hourly and Salaried Employees

For Hourly Employees:

1. Identify the employee’s hourly wage.

2. Multiply their hourly wage by 1.5.

3. Multiply the time and a half rate by the number of overtime hours worked.

For Salaried Employees:

Salaried employees qualify for overtime if they earn below the FLSA threshold of $35,568 per year ($684 per week). Here’s how to calculate their overtime rate:

1. Divide the employee’s weekly salary by the number of hours they typically work per week (usually 40) to get the hourly wage.

2. Multiply that rate by 1.5 to find their overtime rate.

3. Multiply the overtime rate by the number of overtime hours worked.

Examples of How to Calculate Time and a Half

Example for Hourly Employees:

It’s the busy summer season at a beach-side clothing store, and Selene has worked 56 hours during her 40-hour workweek. She is paid $10.50 per hour, and overtime pay is time and a half.  

Selene works at a retail store and earns $10.50 per hour. One week, she works 56 hours, meaning she has 16 overtime hours.

1. Calculate the time and a half rate:
   $10.50 × 1.5 = $15.75

2. Calculate overtime pay:
   $15.75 × 16 = $252

3. Calculate total earnings for the week:
   (40 hours × $10.50) + $252 = $672

For salaried employees: 

Trey works for an accounting firm and earns $35,000 per year. One week, he works 68 hours—28 hours of overtime.

1. Find weekly salary:
   $35,000 ÷ 52 = $673 per week

2. Calculate hourly rate:
   $673 ÷ 40 = $16.83 per hour

3. Calculate overtime rate:
   $16.83 × 1.5 = $25.24 per hour

4. Calculate overtime pay:
   $25.24 × 28 = $706.72

5. Calculate total earnings for the week:
   $673 + $706.72 = $1,379.72

Why Accurate Overtime Calculations Matter

Ensuring employees receive proper overtime pay is critical for compliance and employee satisfaction. Miscalculations can lead to:

• Legal penalties for wage violations

• Payroll discrepancies that cause dissatisfaction

• Increased turnover due to inaccurate or delayed payments

To avoid these issues, consider using payroll software to automate calculations and ensure compliance.

Streamline Payroll with BerniePortal

Calculating time and a half, or overtime pay in general, if you award more than the standard, ensures your workforce is fairly compensated for extra hours worked. If you’re concerned about calculating overtime correctly, especially as your organization grows, consider using payroll software to do the work for you. 

BerniePortal’s Payroll feature uses our native time and attendance feature to tally overtime, withdraw taxes, and deliver your employees an accurate and timely direct deposit every pay period. Calculating payroll is time-consuming, and the risk of error rides the potential of not paying your employees—losing you valuable talent or causing legal issues. BerniePortal relieves your payroll headache so you can run payroll the right way—every time.  

Additional Resources

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• BernieU—free online HR courses, approved for SHRM and HRCI recertification credit
• BerniePortal Blog—a one-stop shop for HR industry news
• HR Glossary—featuring the most common HR terms, acronyms, and compliance
• Resource Library—essential guides covering a comprehensive list of HR topics
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