Not tracking overtime hours accurately often leads to miscalculation of payments which is frustrating for you, the employee.
It can take longer than one pay period for companies to correct these miscalculations. That’s weeks, maybe even months, of you waiting for money to pay your bills or buy groceries. Can you afford that wait?
This is why it’s important for you to track and report your overtime hours with complete accuracy. If you’re unsure how to track your overtime payment, keep reading to learn how.
What is Considered Overtime?
Overtime is any hours worked over the 40-hour workweek.
This means that if you work 8 hours a day, but one day you work 10 hours, you earn 2 hours of overtime pay.
Overtime pay is calculated at 1.5 times your regular hourly rate for every hour over 40 hours worked in a week. So, if you make $15 per hour, you would be paid $22.50 per hour for overtime.
How to Track Overtime Hours
The best way to track your overtime hours is to keep a daily log of the time you clock in and clock out. This will help ensure accuracy and prevent any potential disputes.
If your employer uses a timekeeping system, such as an online timesheet, make sure that the hours you log are accurate. If you notice any discrepancies, report them to your supervisor right away.
It’s also a good idea to keep track of any overtime hours you work outside of your regular schedule. For example, if you’re asked to come in early or stay late for a meeting, make a note of it to include it in your overtime calculation.
Calculating Your Overtime Payment
Once you’ve tracked all of the overtime hours you’ve worked, it’s time to calculate your payment. To do this, multiply the number of overtime hours by 1.5 (this is your overtime rate). Then, multiply that number by your regular hourly rate.
For example, if you worked 10 hours of overtime and your regular hourly rate is $15, your calculation would look like this: 10 x 1.5 = 15; 15 x $15 = $225. This total means you earned $225 in overtime pay for that week. Your calculations must be accurate as you must report your overtime payment in your income tax.
Pay Stub With Overtime Hours
It’s good to keep copies of your pay stubs for your financial records. This way, you can refer to them if there’s ever any confusion about your overtime pay.
When you receive your paycheck, look at the pay stub to see if your overtime hours and pay are accurately reflected.
If they’re not, bring it to your employer’s attention so they can make the necessary corrections.
Creating Accurate Pay Stubs
Your overtime payment will be clearly detailed on your pay stub. Using an online pay stub generator as part of your payroll systems can help you to automate this process.
If you’re not yet creating professional pay stubs in your business, start today with the accurate and easy-to-use pay stub templates that you can find online.