Eligible employees not paid by the hour are still entitled to overtime. However, an hourly rate must be determined to calculate overtime.
To calculate the hourly rate for eligible employees paid on a monthly basis, multiply the monthly wage by 12, divide the result by 52, and then divide by the regular weekly hours (weekly hours cannot be more than 40).
|Monthly wage rate||= $2,500.00|
|x 12 months (yearly rate)||= $30,000.00|
|÷ 52 weeks (weekly rate)||= $576.92|
|÷ 40 hours (hourly rate)||= $14.42|
|x 1.5 (overtime rate)||= $21.63|
Note: If the regular weekly hours worked were 37.5 hours, the weekly rate ($576.92) would be divided by 37.5 to give an hourly rate of $15.38.