Employees who hold multiple roles within the same company may receive different hourly rates for each position. For example, an employee might earn $15 per hour as a receptionist, $20 per hour as a customer service representative, and $25 per hour as a project coordinator.

When such an employee works overtime, calculating their overtime pay can be complex due to the varying pay rates. To determine the correct overtime rate, you should first calculate the weighted average of their different hourly rates. This method, known as weighted or blended overtime, involves averaging the employee's various pay rates and then using this average rate to compute their overtime wages. It differs from the traditional method of paying 1.5 times the employee’s regular pay rate for all hours worked beyond 40 hours in a week or 8 hours in a day.

WorkEasy Software calculates the weighted average overtime automatically using three different formulas:

- Weighted Base Rate
- Reg Rate + Weighted Factor
- Weighted Base Rate x Factor

### Weighted Base Rate

This method calculates the overtime rate by averaging all of the employee's regular pay rates and then multiplying that average by the overtime factor. This means that all overtime hours will be paid at the same rate, regardless of which shift the employee was working.

Here's an example.

An employee worked 50 hours in one week in two different jobs:

- In Job 1, he worked 30 hours at $15 per hour.
- in Job 2, he worked 20 hours at $20 per hour.

The factor is **1.5**.

The weighted base rate would be calculated as follows:

Weighted Base Rate = All Wages / All Hours - (h1 x r1 + h2 x r2) / (h1 + h2)

= ($15 x 30 + $20 x 20) / 50

= $17

The overtime rate would be calculated as follows:

Overtime Rate = Weighted Base Rate x Factor

= $17 x 1.5

= $25.5

Therefore, the final payment for this employee would be:

Final Payment = Regular Pay + Overtime Pay

= (40 x $17) + (10 x $25.5)

= $680 + $255

= $935

### Reg Rate + Weighted Factor

This method keeps the employee's regular rate of pay unchanged but calculates the overtime rate by adding the weighted factor to the regular rate. The weighted factor is calculated by multiplying the weighted base rate by (factor - 1).

Here's an example.

An employee worked 50 hours in one week in two different jobs:

- In Job 1, he worked 30 hours at $15 per hour.
- in Job 2, he worked 20 hours at $20 per hour.

The factor is **1.5**.

The weighted base rate would be calculated as follows:

Weighted Base Rate = All Wages / All Hours - (h1 x r1 + h2 x r2) / (h1 + h2)

= ($15 x 30 + $20 x 20) / 50

= $17

The overtime rate would be calculated as follows:

Weighted Factor = Weighted Base Rate x (Factor - 1)

= $17 x (1.5 - 1)

= $8.5

Overtime Rate for Job 1 = RegRate + Weighted Factor

= $15 + $8.5

= $23.5

Overtime Rate for Job 2 = RegRate + Weighted Factor

= $20 + $8.5

= $28.5

Therefore, the final payment for this employee would be:

Final Payment = Regular Pay + Overtime Pay

= (30 x $15) + (10 x $20) + (10 x $28.5)

= $450 + $200 + $285

= $935

### Weighted Base Rate x Factor

This method also keeps the employee's regular rate of pay unchanged but calculates the overtime rate by multiplying the weighted base rate by the overtime factor.

Here's an example.

An employee worked 50 hours in one week in two different jobs:

- In Job 1, he worked 30 hours at $15 per hour.
- in Job 2, he worked 20 hours at $20 per hour.

The factor is **1.5**.

The weighted base rate would be calculated as follows:

Weighted Base Rate = All Wages / All Hours - (h1 x r1 + h2 x r2) / (h1 + h2)

= ($15 x 30 + $20 x 20) / 50

= $17

The overtime rate would be calculated as follows:

Weighted Factor = Weighted Base Rate x (Factor - 1)

= $17 x (1.5 - 1)

= $25.5

Therefore, the final payment for this employee would be:

Final Payment = Regular Pay + Overtime Pay

= (30 x $15) + (10 x $20) + (10 x $25.5)

= $450 + $200 + $255

= $905

**That's it! **😊👍

If you have questions, please call us at (888) 783-1493, email support@workeasysoftware.com, or Submit a Ticket