FAQ > Premium Audits > How do I calculate over time pay for the Audits?
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The premium or excess portion of overtime wages may be deducted from gross wages to determine your workers compensation insurance premium. Below is an example to help illustrate this point.
EXAMPLE:
Daisy Dentist's regular hourly rate of pay is $10.00 per hour. She receives time-and-a-half or $15.00 per hour for hours worked in excess of eight hours a day or forty hours a week. Last week she worked forty-five hours.
| 40 hours | @ | 10.00 | = | $400.00 (regular wages) |
| 5 hours | @ | 15.00 | = | $75.00 (total overtime wages) |
| ________________________ | ||||
| $475.00 (gross wages) | ||||
| Less: 1/3 excess ($75.00/3) | = | $(25.00) (excess overtime) | ||
| ________________________ | ||||
| = | $450.00 is total chargeable wages for w/c premium |
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Deducting the excess overtime may result in sizable savings for your business.
Last updated on June 1, 2010 by Chris Moxley