Section 1-2 Overtime Pay
In this section, you will learn how to figure the straight-time, overtime, and total pay figures for a standard pay period.
In the previous section, we computed straight-time pay that included worked hours from one to 40 per week. You will now learn how to compute the pay for the hours exceeding 40 per week.
The overtime rate is usually 1 1/2 times the hourly rate, which is why it is often colloquially referred to as "time and a half." By multiplying the hourly rate times 1.5, you will find the overtime rate. The overtime rate is then multiplied by the overtime hours (hours worked beyond 40 in a given work week) to compute the overtime pay. Sometimes the overtime rate will be doubled. In that case, multiply the hourly rate times two.
Remember to pay close attention to the amount of hours worked, making note of the time period in which the hours were worked. Then separate the hours into regular and overtime hours. For instance, if John turned in 55 hours of work in a given week and receives $9.00 as his regular rate of pay, you will need to first confirm whether the hours were worked all within one week and then, if needed, separate the hours into regular and overtime hours to compute the total pay.
If we assume that John worked 55 hours during a one-week time period, the hours worked need to be separated into 40 hours of regular time and 15 hours of overtime:
40×9.00 = 360.00
+ 15×13.50( 9.00×1.5 ) = 202.50
562.50
However, if John completed the 55 hours of work over a two-week period and neither of those weeks contained more than 40 hours, then the 55 hours would be multiplied by the regular rate, since John would not have worked over 40 hours in any one week.
Using a calculator with memory functions will make your computations easier. To review how to best utilize the memory functions, follow the guidelines below.
USING A MEMORY FUNCTION CALCULATOR
The memory functions of a calculator allow you to store numbers for later use so that you do not have to re-key the numbers into the calculator.
Example 1 on page 94 of your textbook provides an example of how to use a memory function calculator. Note that in STEP 1, the hourly rate ($8.20) is multiplied by the regular hours worked (40). Because you want the result that is displayed on the calculator ($328.00) to be stored for later use when it is added to the overtime pay, press the M+ key. An "M" appears in the display to show that an amount is stored in memory.
Remember that if you press the "M" key again, the amount that was displayed will be added to the amount already entered into the memory function.
To display the amount that has been added in memory, press the M* or MR button (or equivalent) to recall the number(s) added.
To clear the last number you entered, press the CE (or, if you do not have one, press the C) button only once. To clear all the numbers except the memory, press the C button.
To clear the memory, press the MC or C or CR button until the "M" disappears on the display.
Complete the Concept Check and check your answers at the end of Chapter 1 on page 108 of your textbook. Complete Section 1-2 Practice on page 95, and check your odd-numbered answers with the Selected Answers on page 804 of the textbook. The even-numbered answers appear in the Appendix.