Calculating Total Pay

Our Learning Business Math software program contains over 35 topic areas. One of them is Calculating Total Pay, and this page summarizes the main ideas of this topic. This page is intended for review, and is not a substitute for the interactive, self-paced tutorials of the MathTutor Learning Business Math program.

General Explanation

Many workers earn a fixed amount of money for each hour they work. The amount they earn for each hour is called the hourly rate.
 
Straight-time pay is the amount an hourly worker earns at the hourly rate.
 
The formula for calculating straight-time pay is:
Straight-time Pay = Hourly Rate x Hours Worked
Most hourly workers are expected to work a certain number of hours per week. Usually this is between 35 and 40 hours. This is called "regular hours". When a worker works more than their regular hours they may be paid overtime pay for these additional hours. Often, the overtime rate is 1-1/2 times the regular hourly rate.
 
Overtime pay may be calculated using this formula:
Overtime Pay = Overtime Rate x Overtime Hours Worked
When a worker earns both straight-time pay and overtime pay, their total pay is found using this formula:
Total Pay = Straight-time Pay + Overtime Pay

 
Sample Problem

Todd is paid $6.50 an hour for a regular 40 hour week. His overtime rate is 1-1/2 times his regular hourly rate. Last week he worked a total of 43 hours. What was his total pay?

Solution

First let's calculate Todd's straight-time pay. Todd worked 40 hours at the regular hourly rate.
Straight-time Pay = $6.50 x 40 hours = $260.00
Todd also worked 3 hours of overtime. His overtime rate is 1.5 * $6.50 or $9.75. Now let's calculate Todd's overtime pay.
Overtime Pay = $9.75 x 3 hours = $29.25
To find Todd's total pay we add his straight-time pay and overtime pay.
Total Pay = $260.00 + $29.25 = $289.25