We can use a set of formulas to calculate the pay associated with workers working overtime. The steps below will guide all levels of excel users through the process.
Figure 1: How to Use Basic overtime calculation formula
General Formula
=(regular time*rate) + (overtime*rate*1.5)
Formula
Total pay for overtime: =(E4*G4)+(F4*G4*1.5)
Total hours worked: =(C4-B4)*24
Regular time formula: =MIN(8,D4)
Overtime: =D4-E4
Setting up the Data
- We will set up the data by inputting the Names, Time IN, Time OUT, and RATE for 7 employees in Column A, Column B, Column C, and Column G respectively
Figure 2: Setting up the Data
Calculating the Hours Worked
Excel calculates time as fractions of a day. Hence, 12;00 PM is 12/24 = 0.5, 3:00 AM is 3/24 = 0.125, and so on. To ensure that we do not encounter problems, we will convert the time from its native unit to decimal hours in Column D.
- We will click on Cell D4
- We will insert the formula below into the cell
=(C4-B4)*24 - We will press the enter key
Figure 3: Hours worked for Cell D4
- We will click on Cell D4 again
- We will double click on the fill handle tool which is the small plus sign you see at the bottom right of Cell D4. Select and drag down to copy the formula to other cells.
Figure 4: Hours worked in Column D
Calculating the Regular Work Time
- We will click on Cell E4
- We will insert the formula below into the cell
=MIN(8,D4) - We will press the enter key
Figure 5: Regular time for Cell E4
- We will click on Cell E4 again
- We will double click on the fill handle tool which is the small plus sign you see at the bottom right of Cell E4. Select and drag down to copy the formula to other cells.
Figure 6: Regular time for Column E
Calculating the Overtime
- We will click on Cell F4
- We will insert the formula below into the cell
=D4-E4 - We will press the enter key
Figure 7: Overtime for Cell F4
- We will click on Cell F4 again
- We will double click on the fill handle tool which is the small plus sign you see at the bottom right of Cell F4. Select and drag down to copy the formula to other cells.
Figure 8: Overtime for Column F
Calculating the Total Pay
- We will click on Cell H4
- We will insert the formula below into the cell
=(E4*G4)+(F4*G4*1.5) - We will press the enter key
Figure 9: Total Pay for Cell H4
- We will click on Cell H4 again
- We will double click on the fill handle tool which is the small plus sign you see at the bottom right of Cell H4. Select and drag down to copy the formula to other cells.
Figure 10: Total Pay for Column H
Explanation
=(E4*G4)+(F4*G4*1.5)
=(regular time*rate) + (overtime*rate*1.5)
In this formula, the overtime pay is 1.5 times the normal pay. When overtime is 0, the right side of the formula (overtime*rate*1.5) will be zero and the employee will receive only the normal pay.
Note
- Ensure that you are working on an excel sheet that doesn’t have a prior formula.
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