Question

Note: In this chapter and in all succeeding work throughout the course, unless instructed otherwise, calculate hourly rates and overtime rates as follows:

1.	Carry the hourly rate and the overtime rate to 3 decimal places and then round off to 2 decimal places (round the hourly rate to 2 decimal places before multiplying by one and one-half to determine the overtime rate).
2.	If the third decimal place is 5 or more, round to the next higher cent.
3.	If the third decimal place is less than 5, simply drop the third decimal place.
	Examples:	Monthly rate $1,827 Weekly rate ($1,827 × 12)/52 = $421.615 rounded to $421.62 Hourly rate $421.62/40 = $10.540 rounded to $10.54 O.T. rate $10.54 × 1.5 = $15.81

Also, use the minimum hourly wage of $7.25 in solving these problems and all that follow.

Example 2-18

Rob Hau, a nonexempt employee, works a standard 35-hour week and is paid a salary of $1,080.00. Last week, Hau worked 39 hours and was paid his normal salary of $1,080.00 since he has an agreement with his employer that the salary covers all hours worked with the exception of the work hours over 40.

If he had worked 43 hours, his pay would have been:

Regular (up to 40 hours)	=	$1,080.00
Overtime pay:
$1,080.00 ÷ 35	=	$30.86 per hour
$30.86 × 1.5	=	$46.29
$46.29 × 3	=	$138.87
$1,080.00 + $138.87	=	$1,218.87 gross pay

No matter how many hours John works each week (above and below 40), his gross pay would be $728.00. However, if John works beyond the agreed-upon maximum of 48 hours, he must be paid at one and one-half times his regular rate of pay (1.5 × $14 = $21) for the hours over 48.

Kenneth Caplan is a salaried employee who normally works a 35-hour week and is paid a weekly salary of $542.50. The agreement that he has with his employer states that his salary is to cover all hours worked up to and including 40. This week, Caplan worked 44 hours.

Calculate his gross pay.

Gross pay

$_____________

Answer 1

The following assumptions are taken

·         The employee has to work 35 hours per week

·         The weekly pay is $542.50 if the employee works till 40 hours in a week

·         If employee works more than 40 hours they will be paid overtime

·         The employee has worked 44 hours this week hence will be paid 4 hours overtime

The gross pay of caplan is calculated below

	overtime pay calculation
regular pay upto 40 hours	total hours in week	per hour pay	overtime rate per hour	number of overtime hours	ovetime pay	gross pay
A	B	C=A/b	D = C x 1.5	E=44-40	F=C x E	G= A + F
542.5	35	15.50	23.25	4	93.00	635.50

The gross pay is $635.50