How do you calculate the regular rate of pay?
Add up everything earned for the hours worked in the workweek, then divide by the hours worked.
Regular rate = (hours × rate at each rate + nondiscretionary bonuses, spiffs, commissions and differentials) ÷ total hours worked
Overtime premium = 0.5 × regular rate × hours over 40
The hours were already paid at straight time, so overtime adds only the half-time premium on top. This is the method in DOL Fact Sheet 56C and 29 CFR 778.110.
Example: a tech works 36 hours installing at 28 dollars and 8 hours on service calls at 24 dollars, and earns 400 dollars in spiffs. That is 1,600 dollars for 44 hours, a regular rate of 36.36 dollars. The premium for 4 overtime hours is 72.73 dollars, so the week totals 1,672.73 dollars.
How do you calculate overtime with two pay rates?
Use the weighted average of the rates, called a blended overtime rate. Under 29 CFR 778.115, total earnings from all rates are divided by total hours at all jobs.
Blended rate = (hours at rate 1 × rate 1 + hours at rate 2 × rate 2) ÷ all hours
Example: the same tech without spiffs earns 1,200 dollars for 44 hours. The blended rate is 27.27 dollars and the premium for 4 overtime hours is 54.55 dollars.
- Paying overtime at 1.5 times the rate of the job done in those hours is allowed only under an agreement made before the work (29 CFR 778.419).
- Intuit’s help article says QuickBooks Workforce figures overtime on the highest hourly rate by default.
- For a blended rate in Workforce or QuickBooks Desktop Payroll, you work it out and enter it yourself.
How do bonuses and spiffs change overtime pay?
A bonus, spiff or commission the employee was promised or expects goes into the regular rate, so it raises the overtime premium for that week.
- Included: production, attendance and quality bonuses (29 CFR 778.211), commissions (29 CFR 778.117) and night shift differentials (29 CFR 778.207).
- Left out: discretionary bonuses, gifts, and pay for vacation, holidays or sick days (29 CFR 778.211 and 778.218).
- A bonus for a month or a quarter: spread it back over the weeks it was earned, then pay the extra premium for each week with overtime (29 CFR 778.209).
Example: a 600-dollar monthly bonus earned evenly over 4 weeks adds 150 dollars to each week. In a 45-hour week that is 3.33 dollars more per hour, so 8.33 dollars more overtime is owed for the 5 overtime hours.
Enter only the week’s share of a longer bonus in the calculator.
Can I calculate the regular rate in Excel?
Yes. Put hours in B2:B4, the matching rates in C2:C4 and the week’s bonuses and spiffs in E2.
- Regular rate (F2):
=(SUMPRODUCT(B2:B4, C2:C4) + E2) / SUM(B2:B4) - Overtime premium (G2):
=0.5 * F2 * MAX(0, SUM(B2:B4) - 40) - Total pay owed:
=SUMPRODUCT(B2:B4, C2:C4) + E2 + G2
For a whole crew, paste the sheet into the calculator above instead. It reads one row per person, or several rows per person, and the download has the regular rate and shortfall for each.
Spiffs often live in field software like ServiceTitan while overtime is figured in payroll. To see how the two connect, read our field guide on switching ServiceTitan to QuickBooks Online, or the labor burden calculator for what each hour costs you.
Questions
Is a spiff part of the regular rate?
Yes, when it is promised or paid under a plan the crew knows about. Only a bonus you decide on alone, at or near the end of the period, can be left out (29 CFR 778.211).
Do PTO and holiday hours count toward 40?
Federal overtime is owed on hours worked over 40, and pay for vacation, holidays and sick days stays out of the regular rate (29 CFR 778.218). Enter only worked hours and the pay for them.
Does it cover state overtime rules?
It applies the federal rule: 1.5 times the regular rate for hours over 40 in a workweek. State rules vary, so check your state labor department too.
What does “paid on base rate” mean here?
It is overtime figured at 1.5 times one hourly rate with bonuses left out, the usual payroll default. Enter the gross you paid instead to compare against your real paycheck.
Can I check a month of payroll at once?
Yes. Include a date or week column and pick the day your workweek starts. Rows are added up by person and workweek.
Is my payroll data uploaded anywhere?
No. The math runs in your browser and nothing leaves the page.
Sources
- Fact Sheet #56C: Bonuses under the Fair Labor Standards Act, U.S. Department of Labor, Wage and Hour Division,
- Fact Sheet #56A: Overview of the Regular Rate of Pay under the FLSA, U.S. Department of Labor, Wage and Hour Division,
- 29 CFR 778.115: Employees working at two or more rates, eCFR, Office of the Federal Register,
- 29 CFR 778.209: Method of inclusion of bonus in regular rate, eCFR, Office of the Federal Register,
- 29 CFR 778.211: Discretionary bonuses, eCFR, Office of the Federal Register,
- Calculate overtime based on two hourly rates, Intuit QuickBooks,
