How to Calculate Overtime

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The HR/IR Solutions Overtime Calculator Guide for small-medium sized businesses in Wollongong and the Illawarra

Overtime can be a problem for small to medium-sized businesses based in Wollongong and the Illawarra unless you seek professional help. Overtime is payable by employers when the work that employees do is covered by a modern award.

Some types of work such as human resources managers and some accountants (who work in an accountancy practice) are not covered by a modern award and are not entitled to overtime. Most award-free employees are paid an annual salary as district from an hourly rate.

If your employee is paid at the same rate as the award, overtime is relatively easy to calculate. The award will specify overtime payments as a multiple of the award base pay. For example, the award may specify that the employee should be paid 150% of their regular wage in the first two hours of overtime. The award may then specify that after two hours of overtime, the employee should be paid 200% of their regular wage.

Overtime rates usually start when the employee starts working more hours than they are contracted or have agreed to work. For example, a full-time employee will usually work a 38-hour workweek.

Overtime for part-time employees is complex. Fro example, imagine you have a part-time employee who is contracted to work on Monday Tuesday and Wednesday for say 20 hours. If that employee work on Friday for 5 hours the first two hours have overtime at 150% and the additional 3 hours are calculated at 200%.

Proper employment contracts for part-time employees are essential to managing the overtime issues. Talk to John Morrissey about strategies for managing overtime for part-time employees.

HR/IR Solution can help small and medium businesses in Wollongong and The Illawarra to manage and comply with modern awards particularly overtime and penalty rates with proper Employment Contracts and Individual Flexibility Agreements.

Talk to John Morrissey about an offset agreement in addition to the employment contract that takes into account over-award payments with a flat rate of pay.

Call John on: 0407 069 507

Visit: HRIRsolutions.com.au

Email: john@HRIRSolutions.com.au

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