How to Calculate Hourly Rate With Overtime & Benefits

by Grace Ferguson

Your regular hourly rate and your overtime rate are two different amounts. However, your employer might choose to pay your regular and overtime wages on the same check. In this case, if you receive company benefits, your employer deducts your contributions from your combined regular and overtime wages. With all of your wages lumped into one plus your benefit deductions, determining your hourly pay can get confusing, especially if your pay stub does not reflect the data. To figure it on your own, locate your wages and deductions on your pay stub then read on.

Add all the deductions listed on your pay stub to your take-home pay to arrive at your gross wages. Include mandatory deductions, such as federal and applicable state and local taxes, in addition to voluntary deductions, such as your contributions for 401(k), health insurance, and flexible spending accounts. For example, if your biweekly take-home pay is $750 and total deductions come to $300, then your gross wages would amount to $1,050.

Subtract the overtime wages on your pay stub from your gross pay to arrive at your regular wages. Under federal law, overtime wages represent work hours over 40 per week (see Reference 2). Your remaining wages -- after subtracting overtime -- equal your regular work hours. For example, overtime wages of $150 subtracted from gross wages of $1,050 equal $900, which represents your regular wages.

Divide your regular wages by your regular hours for the pay period to arrive at your hourly rate. For example, regular wages of $900 divided by 80 biweekly hours comes to regular hourly rate of $11.25.

Determine your overtime rate by multiplying your regular hourly rate by 1.5. For example, $11.25 multiplied by 1.5 comes to overtime rate of $16.88. Verify your overtime wages by dividing those wages by your overtime rate. For example, $150 in overtime wages divided by $16.88 equals 8.89 overtime hours, which your employer may round up to nine hours.


  • If you do not have a pay stub, ask your employer for a printout of your wages and deductions so you may do the calculation.
  • If state law says your employer must include hourly rates on employee pay stubs, your employer is obligated to comply (see Q8 of Reference 3).

About the Author

Grace Ferguson has been writing professionally since 2009. With 10 years of experience in employee benefits and payroll administration, Ferguson has written extensively on topics relating to employment and finance. A research writer as well, she has been published in The Sage Encyclopedia and Mission Bell Media.

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