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Labour & prime cost

Overtime Cost Calculator

Is it cheaper to keep paying overtime or to add a shift?

Overtime feels cheaper than hiring because you do not see a new name on the schedule. Enter the hours you are actually paying at premium and compare.

Your figures stay here. The calculator runs on this device; the share link stores its numbers after the # in the URL.
Worked answer$12,118See it ↓
01

Your numbers

A worked example is already loaded. Replace any field with the figures from the source named beside it.

Overtime hours per weekPayroll or timeclock report
22 hrs

Total hours across all staff paid above the regular rate in a normal week.

Average hourly ratePayroll export
$19.00

Average base rate of the people working those overtime hours.

Overtime multiplierYour state's overtime rules
1.5

For covered, nonexempt employees, federal law generally requires at least time and a half after 40 hours in a workweek. State rules may add daily overtime or double time.

Payroll burdenPayroll provider report
11.5%

Employer taxes and workers' comp, which apply to overtime pay too.

02

The answer

Overtime premium per year

$12,118

The extra you pay purely because these hours are overtime

  • Overtime premium per week$233.04
  • Total overtime cost per week$699.11
  • Same hours at regular rate$466.07
  • Overtime premium per month$1,010
  • Total overtime cost per year$36,353
  • Hours a new hire would need to coverAdding a person removes the premium but adds their own burden and training time.22
Compare the annual premium against the true cost of an additional employee before deciding. Overtime avoids recruiting, training, and benefit costs; a new hire avoids the premium and reduces burnout.
03 Show the arithmetic
Overtime cost = overtime hours × hourly rate × multiplier × (1 + payroll burden %)
Regular-rate equivalent = overtime hours × hourly rate × (1 + payroll burden %)
Overtime premium = overtime cost − regular-rate equivalent
04 What the answer leaves out
  • Under the federal FLSA, covered, nonexempt employees generally receive at least time and a half after 40 hours in a workweek. Coverage, exemptions, regular-rate rules, and state requirements can change the result.
  • This is not employment-law advice. Several states add daily overtime thresholds or double time; verify the rule that applies to each employee.
05 Sources
Continue if it helps

The number is the start of the decision.

story Read the ten-minute closeoutTurn a vague shift recap into five observations that can actually change the next service.
Same operating area
01 Prime Cost CalculatorCost of goods plus total labour, against sales. 02 Labour Cost & Sales Per Labour HourLabour percentage, sales per labour hour, and cost per hour worked. 03 True Cost of an EmployeeWhat an hourly employee costs once taxes and insurance are counted.