Overtime pay
Overtime pay is remuneration for hours worked beyond the employee’s normal hours under the applicable terms. It may be paid at a higher hourly rate. Determine whether a stated multiplier represents the total overtime rate or only the extra premium. Include the resulting earnings in gross pay before employee deductions. No universal legal multiplier is assumed.
Worked example
An employee works 40 normal hours at $12 and 5 overtime hours paid at 1.5 times the normal rate. Gross pay is $480 + $90 = $570, before other earnings or deductions.
Common mistake
Do not pay only the premium when the question asks for total overtime earnings: 1.5 times $12 is $18 per overtime hour.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | F1 | Supporting | July 2027–August 2028 |
| ACCA | F2 | Direct | July 2027–August 2028 |
| ACCA | F3 | Supporting | July 2027–August 2028 |
| ACCA | K1 | Supporting | July 2027–August 2028 |
Related terms
Also called: Overtime earnings