Overtime With Multiple Pay Rates: The Weighted Average Method

How to calculate overtime when an employee works two jobs at different hourly rates in the same week, per 29 CFR 778.115.

Actualizado 2026-10-20

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An employee who serves tables at $16 and tends bar at $22 in the same week has one overtime rate, not two. Federal regulation 29 CFR 778.115 says the regular rate for the week is the weighted average of all rates, weighted by hours.

The formula

regular rate   = total straight-time pay ÷ total hours
overtime premium = 0.5 × regular rate × overtime hours
total pay      = straight-time pay + overtime premium

Straight-time pay is every hour at its own rate, including the overtime hours. The premium is only the extra half.

Worked example

Regular rate: $876 ÷ 48 = $18.25. Overtime hours: 8. Premium: 0.5 × $18.25 × 8 = $73.00. Total: $949.00.

Compare with paying overtime at the rate of whichever job was worked last: if the bartending shifts were last, 8 × $22 × 1.5 = $264 for those hours instead of $176 + $73 = $249, a difference of $15 in the employee’s favour. If the server shifts were last, the employee would be underpaid. The weighted average is the default because it is neutral.

The agreed-rate alternative

29 CFR 778.419 allows an employer and employee to agree in advance that overtime will be paid at the rate of the job being performed during the overtime hours. That must be a real agreement made before the work, and it cannot be used to steer overtime into the lower-paid job.

Daily overtime states

In California, daily overtime hours also use the weighted average regular rate. Double time hours use a premium of 1.0 times the regular rate (the full extra hour) on top of straight-time pay.

Rounding

Keep the regular rate unrounded until the end; rounding $18.25 is harmless here but $18.2456 rounded to $18.25 across many hours adds up. Our engine keeps straight pay in integer cents, computes the premium as an exact ratio and rounds once.

In a spreadsheet

Straight pay:  =SUMPRODUCT(hours_range, rate_range)
Total hours:   =SUM(hours_range)
Regular rate:  =straight/hours
OT premium:    =0.5*regular_rate*MAX(0,total_hours-40)

The Timesheet Calculator’s “multiple jobs” preset does this for every week in the period.

Three rates, with daily overtime

A California employee: 24 hours as a cashier at $17, 16 hours as a shift lead at $21, and 10 hours stocking at $18.50, including one 12-hour day.

Straight pay: 24 × 17 + 16 × 21 + 10 × 18.50 = 408 + 336 + 185 = $929. Hours: 50. Regular rate: $18.58.

Daily overtime on the 12-hour day: 4 hours (8 to 12). Regular hours for the week after removing those 4: 46, so weekly overtime adds 6 more. Total overtime 10 hours. Premium: 0.5 × $18.58 × 10 = $92.90. Total pay: $1,021.90.

Shift differentials and bonuses

A night differential of $2 an hour is part of the regular rate. Treat the differential hours as a separate rate line (base + $2) in the weighted average. A non-discretionary production bonus of $100 for the week is added to straight pay before dividing by hours, raising the regular rate and therefore the overtime premium. Discretionary bonuses and holiday gifts are excluded.

Tipped employees

The regular rate for a tipped employee is the full minimum wage (not the cash wage) plus any other pay, because the tip credit is still taken on the overtime hours. At a $7.25 minimum and $2.13 cash wage, overtime is paid at 1.5 × $7.25 = $10.88 minus the $5.12 tip credit, or $5.76 cash per overtime hour.

Frequently asked

Can I just pay overtime at the higher rate to be safe? Yes; paying more than the weighted average is lawful. Paying at the lower rate is not, unless there is a valid prior agreement under 778.419 and the overtime genuinely occurred in the lower-rate job.

Does the weighted average change every week? Yes, because the mix of hours changes. It must be recomputed for each work week.

What about salaried non-exempt employees with an hourly second role? Convert the salary to an hourly equivalent for the hours it covers, add the hourly job’s pay, and take the weighted average of the whole.

Does the premium use 0.5 or 1.5? 0.5 on top of the straight-time pay already included, which is the same money as 1.5 times the regular rate for the overtime hours only; the two ways of writing it give identical totals.