Hourly Pay Calculator

The rate your check was built from

A payslip reports dollars, and a job offer reports an hourly rate. Between those two documents sits the question this calculator answers: given the money that arrived and the hours that produced it, what is the real rate? The direction of the math is the whole point. The hourly-to-salary pages on this site start from a known rate and multiply outward, 52 weeks times 40 hours times the rate; this page starts from the check and divides backward, which is what you need when hours swing, overtime comes and goes, or tips are part of the income.

Dividing is not as trivial as it sounds, because overtime breaks the naive division. If you divide gross pay by hours worked, the overtime hours are silently averaged into the rest, and the result flatters nothing, but it also tells you nothing about the base rate your next raise will build on. The fix is to remove the overtime premium first, which the next section shows, and then rebuild the stack of rates: base, with premium, with tips, door to door.

How the back-out formula works

Under the FLSA, a nonexempt worker who works H hours with OT of them overtime is owed gross pay of G = R × (H + 0.5 × OT), where R is the regular hourly rate: every hour pays straight time, and each overtime hour adds a half-rate premium on top. Rearranged, the base rate falls out of the check: R = G ÷ (H + 0.5 × OT). Each overtime hour counts as 1.5 ordinary hours, so it contributes 0.5 to the divisor but nothing else.

Worked through a real check: $2,340 gross for a biweekly period of 80 hours, 6 of them overtime. The hour-weighted denominator is 80 + 0.5 × 6 = 83, and 2,340 ÷ 83 = 28.19 dollars per hour. The premium the overtime added is 6 × 28.1928 × 0.5 = 84.58 dollars, and the check verifies: 83 × 28.1928 = 2,340.00 dollars.

The rate most people quote, gross ÷ hours, is $2,340 ÷ 80 = $29.25. Both numbers are true and they answer different questions: $28.19 is the base rate a raise percentage would apply to, while $29.25 is what each hour on the clock earned this period once the overtime luck was spread evenly.

The FLSA rules the back-out leans on

Three federal rules make the arithmetic above the legally correct reading of a check. First, Department of Labor Fact Sheet #23 requires overtime at not less than 1.5 times the regular rate for hours over 40 in a workweek, and defines a workweek as a fixed and recurring period of 168 hours that can start on any day. Federal law does not require premium pay for weekends, holidays or daily overtime; only the weekly total triggers it.

Second, the regular rate is not necessarily the number on the offer letter. Fact Sheet #56A defines it as total compensation for the workweek divided by total hours worked, and it must absorb most extras, including nondiscretionary bonuses and shift differentials. Third, the floor: the federal minimum wage has been $7.25 per hour since July 24, 2009, and no regular rate may fall below it. The Fact Sheet #22 guidance on hours worked also decides which hours belong in the denominator at all, which matters when breaks are unpaid.

State law can add to all of this. California, for example, owes daily overtime after 8 hours in a day, so a check with long days and short weeks can be legal there at hours the federal formula would not explain. The calculator assumes the federal weekly rule.

Worked example: a $2,340 biweekly check

Put the whole stack together for a kitchen worker whose biweekly check shows $2,340 gross, 80 hours with 6 overtime, $180 in tips on a side catering shift, 100 minutes of unpaid meal breaks across the period and 240 minutes of commuting. Each rate answers a different question, and the calculator prints all of them.

The door-to-door figure adds the 100 unpaid break minutes and 240 commute minutes to the hours: 340 minutes is 5.67 hours, so 2,520 ÷ 85.67 = 29.42 dollars. Notice the ordering. Tips lift the rate more than the commute drags it here, but for a worker with a long unpaid commute and no tips the door-to-door rate can sit well under the base rate, and that is the number to compare against a job closer to home.

Tipped shifts and the $2.13 cash wage

For tipped work the check understates income on purpose. Department of Labor Fact Sheet #15 lets employers pay a direct cash wage as low as $2.13 per hour and claim a tip credit of up to $5.12, so cash wages plus tips reach at least the $7.25 federal minimum. Only tips the employee receives count toward that test, and if they fall short in a workweek the employer must make up the difference.

That structure means the honest hourly rate for tipped work is cash pay plus tips divided by hours. A server whose weekly check shows $950 gross for 42 hours with 2 overtime, plus $310 of declared tips, earns 950 + 310 = 1,260 dollars, and 1,260 ÷ 42 = 30.00 an hour all in, against $22.62 on the check alone. The overtime premium itself is computed on a regular rate of at least the full $7.25, not the $2.13 cash wage, so a tipped employee is owed 60 × 7.25 + 20 × 3.625 = 507.50 dollars in wages for a 60 hour week before the tip credit is applied.

Keep records of tips separately from the check. The back-out formula assumes gross pay already includes every premium owed; if tips are undeclared, the tip-inclusive rate is only as honest as the numbers typed in.

Unpaid breaks and the commute: the door-to-door rate

The hours line on a timesheet and the hours a job takes out of a week are not the same. Federal rules draw the line as follows, and the calculator lets you put the unpaid minutes back in so the rate reflects them.

The door-to-door rate divides total money by total hours away from home, unpaid breaks and commuting included. It is not a legal claim: an employer does not owe you for commuting, and Publication 463 treats those costs as personal. It is a personal yardstick. If two jobs pay the same $22 an hour but one costs 90 unpaid minutes a day in commuting and lunch, its door-to-door rate is roughly 15 percent lower, and that difference is real compensation.

Against a salary offer: annualizing the check

To compare hourly work with a salaried offer, multiply the check by the number of checks a year, then compare hourly equivalents on the same hours.

The $2,340 biweekly check annualizes: 2,340 × 26 = 60,840 dollars. A $62,000 offer at the same 2,080 hours a year works out to 62,000 ÷ 2,080 = 29.81 an hour, so the offer is worth about $1,160 a year more than the current check, or $0.56 an hour. That is a small gap, and the decision should turn on what the hourly rate cannot see: health insurance, paid time off, retirement match, and whether the salaried role is exempt, which would remove overtime pay entirely.

Run the comparison on matching hours. If the salary job expects 45 hours a week with no overtime, its effective rate is 62,000 ÷ 2,340 = 26.50 an hour, and the hourly job with overtime now wins on money alone.

Where the back-out breaks down

The formula R = G ÷ (H + 0.5 × OT) assumes the check was built the federal way: one regular rate, straight time for all hours, a half-rate premium on each overtime hour. Four situations bend that assumption, and each one needs a correction before the result is honest.

Bonuses and commissions. Nondiscretionary bonuses and commissions belong inside the regular rate, so a check that includes them divides cleanly, but the base rate it produces is only good for that week. Gifts, vacation pay and expense reimbursements are excluded from the regular rate, so a check padded with those should have them subtracted first.

Semimonthly periods. Overtime is a weekly rule, and a semimonthly check straddles workweeks unevenly. Divide a semimonthly check by the hours of the whole period and the premium gets averaged across weeks; enter each workweek separately for the cleanest result.

Daily overtime states. Where state law pays after 8 hours in a day, the check can include a premium the weekly formula cannot back out. The result will slightly understate the true base rate.

Salaried nonexempt pay. If a fixed salary covers a set schedule, the salary already assumes a given number of hours, and overtime owed on top is computed from the rate the salary implies. Enter the salary's implied hours, not the ones worked, unless the check itemizes the premium.