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Overtime occurs when an employee works beyond their contracted hours. The meaning of overtime can vary. In a flexible working environment time contractual hours may be calculated over a week or month; an employee will not reach the threshold for overtime until they complete their contractual hours for this period. More typically in the UK an employee will reach the threshold for overtime based on their contractual hours per day.
Overtime is not always paid at a higher rate although this is not uncommon, in addition multiple overtime rates may be available based on various thresholds. Alternatives to higher rates of pay are sometimes used. Time off in lieu (TOIL) schemes are an example of this where an employee can accrue additional paid leave as an alternative to additional salary.
To account for this the calculator provides two means of calculating the overtime percent, both as a comparison of pay and also a comparison of hours.
The formula used in the calculation is:
Overtime Percent = (Overtime Pay / Total Pay) * 100
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