How the Payroll Process Calculates Premium Overtime with a California Flat-Sum Bonus

This is how the payroll process would calculate overtime pay for an employee that:

1. Earns $10 per hour on a weekly payroll

2. Works 40 hours with 10 hours overtime

3. Earns a $200 flat-sum bonus in California that impacts their premium rate

This is how the process calculates the amounts.

Element type	Start date	End date	Hours worked	Rate ($/hr)	Amount calculated
Regular salary	01-JAN-2010	07-JAN-2010	40	10	$400
Overtime	03-JAN-2010	03-JAN-2010	10	10	$100
Bonus	07-JAN-2010	07-JAN-2010	n/a	n/a	$200
Premium overtime	03-JAN-2010	03-JAN-2010	10	7	$70
Premium overtime	03-JAN-2010	03-JAN-2010	10	7.5	$75

This is how the process calculates the premium overtime rate.

Overtime period	Elements used	Start date	End date	Hours worked	Rate ($/hr)	Value	Premium rate
1	Regular salary Overtime Bonus	01-JAN-2010	07-JAN-2010	40 + 10 = 50	10	400 + 100 + 200 = $700	700 / 50 = 14 14 * 0.5 = 7.00 $/hr 200 / 40 = 5 5 * 1.5 = 7.5 $/hr

1. Calculates straight time and straight time overtime.

   (40 hours * 10 $/hr) + (10 hours * 10 $/hr) = $500

2. Determines the standard FLSA premium rate.

   [(50 hours worked * 10 $/hr) + $200 bonus] / 50 hours = 14 $/hr * 0.5 = 7 $/hr

3. Calculates the premium overtime amount.

   7 $/hr * 10 hours = $70

4. Determines the flat-sum bonus rate.

   $200 bonus / 40 regular hours * 1.5 = 7.5 $/hr

5. Calculates the additional premium earned.

   7.5 $/hr * 10 overtime hours = $75

6. Calculates total amount earned.

   $ 400 regular earnings + $100 standard earnings + $200 bonus + $70 premium overtime + $75 bonus overtime = $845