Overtime Calculator

Overtime is two questions, not one

Everybody thinks overtime is about the multiplier. Time and a half, double time, whatever your workplace calls it. Get the multiplier right and the rest follows.

It does not, though. Before the multiplier means anything, two other things have to be settled, and both of them vary depending on which country you are standing in.

Which hours count as overtime. Everything past 40 in a week? Past 48? Past 8 in a day regardless of the week?

What the premium is calculated on. Your basic salary, or your basic salary plus every allowance and bonus you receive?

Two people on identical pay, working identical hours in different countries, can be owed genuinely different amounts because those two answers differ. The multiplier is the easy bit. This page is mostly about the other two.

What goes in each box, and a units trap

Five fields. Four of them do what you would expect.

Notice the units on the first and last rows. Regular time is weekly. Overtime hours are monthly. That is not a slip, it is how overtime actually gets tracked in most workplaces, since your contract states a weekly schedule and your payslip totals a month. But it does catch people, so it is worth reading those labels twice.

The multiplier and the overtime rate are related, obviously. Your overtime rate is your regular rate times the multiplier. On $350 an hour at time and a half, that is $525. Work out that number and put it in the Overtime Pay box, because that is the field the calculation reads.

Where the line sits depends on where you work

This is the first of the two questions, and the answers are genuinely different.

Under Nepal's Labour Act 2074, normal working hours are eight a day and forty eight a week, and anything past that is overtime at one and a half times.

The United States sets the line at forty hours, and the Department of Labor is precise about what a week means here: a workweek is a fixed and regularly recurring period of 168 hours, seven consecutive 24 hour periods, and it does not have to line up with the calendar week. It can start any day, at any hour.

That precision matters more than it sounds. It means overtime is worked out week by week, and weeks cannot be averaged against each other. Sixty hours one week and twenty the next is not two normal forty hour weeks. It is one week with twenty hours of overtime owed, and one quiet week. Averaging them is not permitted, and the US rules add that the obligation cannot be signed away by agreement either.

So when you fill in the monthly overtime hours box, work out the overtime for each week separately, then add those weekly figures together. Do not take your monthly total hours and subtract a monthly threshold. Those two methods give different answers, and only one of them is how you are actually owed.

One more thing worth knowing. Neither system pays a premium for weekends or public holidays as such. In the US, the rules say plainly that Saturday, Sunday and holiday work does not attract overtime unless overtime is actually worked on those days. If your workplace pays extra for weekends anyway, that is your contract being generous rather than the law demanding it.

And what the premium is a premium on

Now the second question, and the one almost nobody checks.

One and a half times what?

Nepal's Labour Act sets overtime at 1.5 times the basic remuneration the worker receives for regular hours. Basic. Under Nepali practice, pay is often structured as a basic salary plus a dearness allowance, and the overtime premium attaches to the basic figure.

The United States takes the opposite approach. Overtime is 1.5 times the regular rate, and the regular rate is not your base wage. The Department of Labor defines it as total pay for the workweek divided by total hours actually worked, with only specific statutory exclusions. Non-discretionary bonuses, shift differentials and most allowances get folded in first, and only then is the multiplier applied.

The gap between those two bases can be large. Someone whose pay is 70 percent basic and 30 percent allowances would have an overtime rate roughly 30 percent higher under the American definition than under a basic-only one, on identical total pay.

The US rules also carry a useful example of what happens when someone is on a salary rather than an hourly rate. Hire someone for a 45 hour week on a weekly salary of 405 dollars, and the regular rate is 405 divided by 45, which is 9 dollars. The five overtime hours are then owed an additional half of that rate, so 4.50 times 5, which is 22.50 on top.

That is the reasoning to copy even if the numbers do not apply to you. Work out the true hourly value of everything you are paid, then apply the multiplier to that.

So before you type anything in the Regular Pay box, ask what your contract and your local law actually treat as the base. It is a bigger lever than the multiplier ever is.

Turning a weekly wage into a monthly one

Your regular hours are weekly and the result is monthly, so something has to bridge them. That something is a constant, and it is worth knowing which one we use.

The obvious guess is four weeks in a month. It is also wrong, and expensively so, because twelve months of four weeks is only 48 weeks and the year has rather more than that.

This calculator uses 4.348125 weeks per month. That comes from the Gregorian calendar year of 365.2425 days, divided by 7 to get weeks, divided by 12 to get months.

On 40 hours a week at $350 an hour, the difference between the two is not small:

Nearly five thousand rupees a month, or about eight percent of the wage, purely from a rounding assumption. If a payslip disagrees with this calculator by roughly that proportion, the weeks-per-month constant is the first place to look.

Worth flagging one inconsistency in our own tools: our pay raise calculator uses 4.333333 weeks per month, which is 52 weeks in a year rather than 52.1775. The two constants differ by about a third of a percent, so results from the two tools will not line up to the last rupee.

Running one through

Take a standard case. 40 hours a week at $350 an hour, with 20 hours of overtime in the month at time and a half.

Time and a half on $350 is $525, so that is what goes in the overtime rate box.

Following it through: 40 hours times $350 is $14,000 a week, times 4.348125 gives $60,873.75 a month. Then 20 hours times $525 is $10,500. Add them and you have the total.

Two things worth pulling out of that. Twenty hours of overtime, which is about five hours a week, added 14.7 percent to the month's pay. And of that $10,500, a third of it, $3,500, is the premium itself. The other $7,000 is just the ordinary value of the hours worked.

That split is the honest way to think about whether overtime is worth it. You are not being paid $525 an hour extra. You are being paid $350 you would have earned anyway, plus $175 for the inconvenience.

There is a ceiling on overtime as well

Most overtime calculators will happily accept two hundred hours and hand you a total. Worth knowing that in many places that total would be illegal rather than impressive.

Nepal's Labour Act caps overtime at four hours a day and twenty four hours a week, and requires the worker's consent before any of it. Workers under eighteen cannot be required to work overtime at all. There is also a right to a half hour break after five continuous hours, and that applies during overtime too.

Turn that weekly cap into the monthly units this calculator uses and it comes to roughly 104 hours a month, using the same 4.348125 constant. If the number you are about to type is above that, the question is not what it pays. The question is whether it should have happened.

The US takes a different view here. Federal law sets no limit at all on hours for workers aged sixteen and over. It only insists that the premium gets paid. So a very large overtime figure is legal there and merely expensive for the employer.

Either way, a calculator will not tell you when a schedule has stopped being sustainable. Only you can see that part.

Questions people ask

Do I fill in both the multiplier and the overtime rate?

Fill in the overtime rate, since that is the field the sum reads. Work it out by multiplying your regular rate by your multiplier, so $350 at 1.5 gives $525.

My overtime varies week to week. What do I enter?

Work out the overtime hours for each week on its own, then add those weekly figures together and enter the total. Do not average across weeks, because that is not how overtime accrues.

I am on a monthly salary, not an hourly rate.

Divide your monthly pay by your monthly hours to get an hourly figure first. Check your contract and local law on whether allowances belong in that base before you divide.

Does weekend work automatically pay extra?

Not as a matter of law in either Nepal or the United States. A premium applies when the hours themselves are overtime hours. Anything beyond that is your contract or your employer being generous.

Does every employee get overtime?

No. Both systems exempt certain roles, typically managerial and professional ones, though the tests differ and are stricter than most employers assume. Check your category before assuming either way.

What about double time?

Enter your regular rate times 2 in the overtime rate box. Double time is generally a contractual or state-level entitlement rather than a national statutory minimum.

The result shows rupees. Can I use another currency?

Yes. There is no currency in the arithmetic, only rates and hours, so enter your own and read the answer in the same units.

References

A note on the sources. The two claims doing the most work on this page, that overtime accrues week by week rather than across a month and that the premium in the United States attaches to a regular rate broader than base pay, both come from the Department of Labor's own fact sheets rather than from us. The Nepali thresholds, the 1.5 times basic remuneration rule and the caps on overtime hours come from the Labour Act 2074 and the Labour Rules made under it, which are the governing instruments and worth reading directly if a payslip is in dispute.

1. U.S. Department of Labor, Wage and Hour Division, Fact Sheet #23: Overtime Pay Requirements of the FLSA, on the 40 hour workweek, the definition of a workweek as a fixed recurring 168 hour period, and the rule that overtime may not be waived by agreement. https://www.dol.gov/agencies/whd/fact-sheets/23-flsa-overtime-pay
2. U.S. Department of Labor, Wage and Hour Division, Fact Sheet #56A: Overview of the Regular Rate of Pay Under the Fair Labor Standards Act, on what compensation is included in the base the overtime premium is applied to. https://www.dol.gov/agencies/whd/fact-sheets/56a-regular-rate
3. U.S. Department of Labor, Wage and Hour Division, Overtime Pay, on the absence of any statutory limit on hours for workers aged sixteen and over. https://www.dol.gov/agencies/whd/overtime
4. Government of Nepal, Labour Act 2074 (2017) and Labour Rules 2075 (2018), working hours and overtime provisions: eight hours a day and forty eight a week, overtime at 1.5 times basic remuneration, capped at four hours a day and twenty four hours a week, with a half hour break after five continuous hours.