Shift premium
A shift premium is additional remuneration for working a specified shift, such as nights, rather than simply for exceeding normal hours. It forms part of employee earnings. Its assignment as direct or indirect cost depends on the purpose of the shift, traceability and the costing convention used. Distinguish it from an overtime premium because an employee can work normal contracted hours on a premium-rated shift.
Worked example
A night shift pays a $2 supplement on a $15 basic hourly rate. For 40 shift hours, premium pay is $80 and total basic-plus-premium pay $680.
Common mistake
Do not assume that a night shift is overtime or calculate both premiums unless the employment terms provide for them.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | MA | Direct | September 2026–June 2027 |
| FIA | FMA | Direct | September 2026–June 2027 |