How to calculate overtime for hourly staff, without the headache
A plain-English guide to working out overtime for shift teams — what counts, how to set a threshold, and the mistakes that quietly overpay or underpay.
Overtime is one of those things that feels simple until you're staring at a week where someone did a double, swapped a shift, and took an hour's unpaid break. Let's make it boring again.
Start with your threshold
Overtime is just hours worked beyond an agreed line. Most shift businesses set that line weekly — commonly the contracted hours, e.g. 40. Anything up to 40 is regular; anything past it is overtime. Decide the number, write it into the contract, and apply it the same way every week.
The basic calculation
- Add up the actual hours worked in the week (after unpaid breaks).
- Regular hours = the lesser of hours worked and your threshold.
- Overtime hours = whatever's left over.
So 46 hours worked against a 40-hour threshold is 40 regular + 6 overtime. If you pay an overtime multiplier, apply it only to those 6.
The mistakes that cost you
- Counting overtime daily instead of weekly (or vice versa) without deciding which — pick one and be consistent.
- Forgetting breaks, so unpaid time inflates the worked total and tips people into overtime they didn't earn.
- Paying a multiplier you never agreed — if your contract doesn't promise time-and-a-half, you don't automatically owe it (check your local rules).
- Hand-totalling from paper, where a single mis-added row skews the whole week.
Keep it auditable
Whatever you decide, the goal is that anyone can look at a week and see why the numbers are what they are. If you can't reconstruct the total, you can't defend it when someone queries their pay.
How miaHQ helps: set a weekly overtime threshold per role and miaHQ splits regular and overtime hours automatically from real clock-in times — breaks already deducted — so the week's totals are right before you export them. See what's inside →