Time And A Half Definition And How To Calculate It | Sage Advice US

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Time and a half definition

Time and a half refers to an increased rate of pay typically reserved for hours worked overtime or those that exceed the 40-hour work week. Overtime pay policies vary between companies, with time and a half being a common rate in many industries, including retail, care work, and construction. It simply means that in addition to the employee’s standard hourly rate, they will get paid an additional one half of that rate for each hour worked in the time and a half window.

What does time and a half mean for employers?

Although it means that they will be surrendering more to payroll, they are also giving acknowledgment of the value of their employees’ time and incentivizing hard work – both marks of a good employer.

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How to calculate time and a half:

Time and a Half Rate = Hourly Rate x 1.5 Assume an employee earns $20 hourly during a 40-hour work week. Their time and a half pay would be $20 x 1.5 for a total of $30 an hour.

When does time and a half apply?

• Time and a half applies when an employee exceeds 40 hours during a workweek.
• Some states have laws requiring time and a half for employees working more than 8 hours.
• Working on holidays is not regarded as working overtime. This includes bank holidays such asLabor Day, Independence Day, Easter, Memorial Day, New Year’s Day, and Christmas.
• With respect to religious holidays, company policy must be issued consistently without discrimination.
• Providing holidays off can help establish more amicable relationships between staff, and may promote a better work-life balance for employees.

Employers: Make sure your payroll is managed accurately with these 4 quick tips.

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See also:

• Overtime definition
• What is gross pay and net pay?
• Understanding pay runs

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The changing face of HR in 2024

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