What is premium overtime pay?

Premium overtime pay represents the additional money someone earns when working overtime. Under the Fair Labor Standards Act, FLSA, non-exempt workers are entitled to receive overtime pay at a rate of 1.5 times their hourly rate for any hours worked over 40 per week. This means that premium overtime pay represents that additional.5 hourly rate.

You can calculate premium overtime pay by taking the hourly rate of a position, and then dividing it by two. That additional money is your premium overtime pay. For example, if a job makes $20 an hour, overtime pay would be $20 plus the premium of $20/2 which is $10 so overall, the total overtime paid to that employee would be $30.