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What Extra Hours Really Cost

At $25/hour, 40 regular and 10 overtime hours at 1.5x costs $1,375 total. The overtime premium alone is $125 (the 0.5x bump), and each OT hour costs $37.50. Under the FLSA, non-exempt workers must receive at least time-and-a-half.

Results

Visualization

Cashbizly provides illustrative business estimates only. Results depend on your inputs and assumptions and are not accounting, tax, or legal advice. Consult a CPA or financial advisor before major decisions. Tax-year figures (mileage, QBI, SEP, etc.) are labelled by year and should be verified at IRS.gov.

How It Works

Regular Pay = Rate x Regular Hours. OT Pay = Rate x Multiplier x OT Hours (FLSA minimum 1.5x for non-exempt over 40/week). The OT premium is the extra over straight time. For exempt salaried staff, OT generally does not apply — classify correctly to avoid wage claims.

What Should You Do?

Scenario 1: 20 OT hours at 1.5x costs the same as 30 straight hours — hiring a second person may be cheaper past a point. Scenario 2: a 2x holiday multiplier doubles OT cost. Scenario 3: misclassifying an exempt worker as non-exempt and skipping OT is a costly FLSA violation.

Frequently Asked Questions

Who is exempt from OT?

Generally salaried employees meeting FLSA salary and duties tests. Misclassification risks back-wages and penalties.

Is 1.5x always required?

It is the federal minimum for non-exempt; some states require daily OT or higher rates — check state law.

When is overtime cheaper than hiring?

For short spikes. For chronic overtime, a new hire usually costs less long-term.

Authoritative References

U.S. Department of Labor — FLSA Overtime — Federal overtime pay rules (time-and-a-half).
IRS — Employment Taxes — Payroll tax on wages including overtime.