Page 141 - Essentials of Payroll: Management and Accounting

ESSENTIALS of Payr oll: Management and Accounting
number of hours left in the pay period, which is 8 hours a day x 7
working days, or 56 hours. Consequently, Ms. Ortiz’s pay for her first
pay period will be $18.51 x 56 hours, or $1,036.56.

Overtime Pay

Overtime is a pay premium of 50 percent of the regular rate of pay that
is earned by employees on all hours worked beyond 40 hours in a stan-
dard workweek. This calculation can vary for individual states, so be
sure to check with the local state agency that tracks wage law issues to
see if there are variations from the federally mandated rule.

When calculating overtime, the employer does not have to include
in the 40 base hours such special hours as vacations, holidays, sick time,
or jury duty.
Example. Ahmad Nefret is a welder who works 47 hours during
a standard workweek at an hourly wage of $22 per hour.The overtime
premium he will be paid is 50 percent of his hourly wage, or $11. The
calculation of his total pay is as follows:

47 hours x regular pay rate of $22/hour = $ 1,034

7 hours x overtime premium of $11/hour = $ 77
Total pay = $ 1,111

Example. Jamie Hildebrandt worked 33 hours during the four-day
workweek following Labor Day. Though her employer will pay her for
41 hours worked (eight hours of holiday time plus 33 hours worked),
there will be no overtime paid out, since eight of the hours were not

actually worked.

Commissions
An employee earns a commission when he or she secures a sale on
behalf of a business. The commission may be earned when an invoice

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