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Don’t let overtime pay keep you up at night

Amanda Dennis SUN_5915 5x7x300dpiOvertime pay – commonly called time and a half – is not as easy to calculate as it would seem. A number of employers – and some accounting software — mistakenly believe that “regular rate of pay” and “hourly rate of pay” are one in the same. Not always true.

Under the Fair Labor Standards Act, employees must be paid more per hour for hours worked over 40 hours. If the employer gets it wrong, the consequences can be costly.

KT Associate Amanda Dennis, in an article that will appear in the KT Addition newsletter, uses the example of the worker whose wage is $8.50 per hour (the hourly rate) plus a $100 bonus. If the worker puts in 50 hours that week, the regular pay would be $525 — $425 ($8.50 x 50 hours) plus the $100 bonus. Overtime would be based on $10.50 per hour (regular rate of pay) – $525 divided by 50 hours.

Her article also looks at workers who do different jobs at different rates of pay for the same company within the workweek. Watch for her article, which will be coming out soon.

Ketel Thorstenson, LLP

Ketel Thorstenson, LLP

Ketel Thorstenson, LLP, has over 60 CPA’s on staff and has been serving clients across the region since 1936. With offices in Rapid City, Spearfish, and Custer SD, the firm offers a variety of services including tax planning and return preparation, audit services, QuickBooks, bookkeeping, payroll, business valuation and estate planning.
Ketel Thorstenson, LLP

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