How is overtime pay calculated

Calculate overtime: with calculator or is there an easier way?

There are many subtleties when it comes to overtime: On the one hand, it must be determined whether this will be compensated for by compensatory time off or against payment. On the other hand, employers and employees must be able to calculate these reliably - as well as the remuneration that results from it.

Calculating overtime is often a complex task, because many factors have to be taken into account for the calculation. Both the overtime wage and the time worked must be included in the total. Many employees lose track of the hours worked because the company may not use time recording. Others, on the other hand, are not familiar with the contractual clauses and are therefore unsure whether they will receive compensation or compensation for it. A simple time sheet and a calculator can be used to calculate overtime - for employers, however, it is much more practical to use systematic timekeeping.


Overtime must be recorded

Every company has overtime from time to time. Employers are required by law to record overtime. This is written down in Section 16 of the Working Hours Act - according to the law, companies are also obliged to keep these records for at least two years. If no system is used for this, the employees have to record their hours manually.



When is overtime paid?

Overtime counts proportionately to the agreed remuneration - this is often written down in the employment contract. They can also be reimbursed as free time, for example if there is a flexitime account and they are saved in the employee's time account by a time recording system. If the working hours stipulated in the employment contract, including those already worked, are exceeded, the employee is not always liable for remuneration - the overtime must be expressly ordered. However, as soon as the maximum weekly working time of 48 hours per week is exceeded, the hours worked in excess of this are to be remunerated at 25 percent of the hourly wage. So here it is important to calculate the overtime exactly. The easiest way to do this is with time recording software.


Easily calculate overtime and pay

If nothing is agreed in the employment contract about a surcharge, one can assume a rule that is customary in the industry. Employees who are paid on an hourly basis can orientate themselves on their hourly wages. Employees with a fixed salary must first calculate the hourly wage by simply calculating with 4.33 weeks per month. So you calculate the gross salary by 4.33 and then by the average number of hours worked per week to calculate your gross hourly wage. Then it has to be multiplied by the surcharge in order to calculate the overtime pay per hour.


Calculate overtime pay with a calculator

If you do not want to use the classic way with pen, paper and paper or a calculator, you can simply try our free overtime online calculator and thus calculate the remuneration. Use the fields listed below for this:


How many hours do you contractually work per week?

What is your gross monthly salary?

What is your overtime allowance as a percentage?

How many hours did you work overtime this month?

Your hourly wage:


Your overtime wage:


Your overtime pay:



Calculating overtime with software: is it easier?

The clear and short answer to this is: Yes! With the help of software for recording working hours, this is completely automatic. Because employees clock in and out. The working hours automatically flow into the working time account, in which the maximum weekly working time is also specified. The overtime is calculated automatically.


Practical tools for small and medium-sized businesses

Anyone who now believes that time tracking software with many practical functions is only available for larger companies is wrong. Because there are many different solutions for various requirements on the market. There are also industry-independent time recording tools that can be used anywhere and customized - regardless of whether in an agency, in the construction industry or in the field of building cleaning. Working time recording in the cloud can be used for every industry. The employees simply use their smartphones for this - the overtime is also calculated completely automatically.



Overtime pay and wage data interface

For larger companies there are also industry-independent solutions that can be individually adapted to the requirements of the respective company. So-called workforce management software is used and can be set up in very small parts. From the determination of personnel requirements through duty scheduling to company health management, the pure time recording can be expanded here with various modules. A number of interfaces are also used, for example for wage data processing or the leading ERP system. This makes it easy to calculate overtime and the remuneration applied for this is automatically included in the payroll accounting.


Would you like to learn more about a simple way to track overtime? Then find out more now and request free material.