Overview: When employees work multiple jobs or roles at different pay rates, calculating overtime can get a bit tricky. To ensure compliance with labor laws and fairness, employers use a method called the weighted average to determine the regular rate of pay for overtime purposes.
However, when pay stubs display total regular and overtime earnings without breaking down each rate individually, it can cause confusion. Employees may see an unfamiliar rate and mistakenly believe they were paid incorrectly.
Instructions:
Understanding Weighted Average Overtime
When an employee works multiple positions with different rates in one week, the FLSA requires that overtime be paid based on a weighted average of all rates worked—not just the highest or lowest.
Example: John works as a dishwasher at $9.00/hr and as a prep cook at $12.50/hr.
In one week, he works:
25 hours as a dishwasher
20 hours as a prep cook
Total = 45 hours (5 hours of overtime)
Step | Calculation | Result |
Regular Pay | (25 × $9.00) + (20 × $12.50) | $475.00 |
Total Hours | 25 + 20 | 45 hours |
Overtime Hours | 45 – 40 | 5 hours OT |
Weighted Avg Rate | $475.00 ÷ 45 | $10.56 |
OT Premium Rate (1/2 time) | $10.56 × 0.5 | $5.28 |
Total OT Pay | $5.28 × 5 OT hours | $26.40 |
Total Pay | $475.00 + $26.40 | $501.40 |
Note: The OT Premium Rate is calculated at 0.5x because the employee has already been paid for all 45 hours at their regular (blended) rate. Overtime laws require you to pay 1.5x the regular rate for OT hours, but since 1.0x is already included in the regular pay, you're only adding the additional 0.5x premium for the overtime hours.
Why the Rate on Your Pay Stub Might Look Different
The rate that appears on your pay stub is often a blended (weighted average) rate, especially if you worked in multiple roles or departments. It’s not one of your assigned rates—it’s the average used to fairly calculate your regular and overtime pay.
This can be confusing if:
You expect to see each role listed separately.
You worked a lot of hours in a higher-paying role but see a lower rate reflecting on your pay stub.
Overtime is calculated based on the average rate, not the highest one.
💡Buddy Punch Payroll calculates pay using all the hours and rates worked, then displays the combined earnings totals on the pay stub for simplicity. However, this may result in a rate that doesn’t match what you were assigned per job.
What to Do if You Have Questions
If you're unsure whether your pay is correct:
Reach out to your payroll admin or manager—they can show you a breakdown of your hours, rates, and how the weighted average was calculated.
You can review your previous timecards and compare the estimated earnings with the gross wages on your pay stub to confirm that all hours and pay rates were captured accurately.
Keep in mind: Even if your stub shows a blended rate, your total earnings are accurate and reflect all roles worked. Since Buddy Punch Time Tracking seamlessly integrates with Payroll, all time and rates sync over and are reflected on your pay stub as a single combined total.
FAQs
Q: Why doesn’t my pay stub list each job and rate separately?
A: Pay stubs show total earnings for simplicity. If you work at multiple rates, your overtime is calculated using a weighted average, which can make the rate on the stub appear different from what you expected.
Q: Can I get a breakdown of my hours and rates?
A: Yes! Your employer or payroll admin can provide a detailed report showing hours worked per job and how your pay was calculated.
Q: Why was I not paid overtime at my highest rate?
A: Federal law requires overtime to be based on the average rate of all hours worked, not the highest rate. This ensures fair compensation across multiple roles.