Blended Rate Calculation Explained

HR staff should be able to explain the overtime payment calculation to nonexempt employees who work two or more jobs at different rates of pay.

The Blended Overtime Rate Calculation Worksheet and Blended Overtime Rate Calculation Worksheet for College, available in the HR Library (member login required), allows for easy calculation of the total weekly pay for a nonexempt employee working two or more jobs at different rates of pay. However, a common misunderstanding is how to apply the blended rate.

First, the regular rates of pay (i.e., straight-time pay) are applied to calculate pay earned for all hours worked. This amount is divided by total hours worked to determine the blended rate or weighted average. The blended rate should then be applied only to the “and a half” portion of time and a half.   The total pay due for the workweek is the sum of straight-time pay earned for all hours worked plus the blended rate multiplied by the “and a half” portion of the overtime.

For example:

Food Service Worker, $15.41 (hourly rate) x 36.5 hours = $562.47
Bus Monitor, $15.00 (hourly rate) x 13.75 hours = $206.25
Total pay at regular rates for 50.25 hours = $768.72

Blended rate (total pay/total hours) or ($768.72/50.25) = $15.30
Overtime premium calculation (blended rate x 0.5 x OT hours) or ($15.30 x 0.5 x 10.25) = $78.41

Total pay due for the workweek:
$768.72 (regular rate of pay for all hours) + $78.41 (OT premium) = $847.13

For more information on the topic, you can reference the article Simplifying Blended Rate Calculation and the Texas Workforce Commission.