How Much Does Overtime Really Cost? A Worked Example for the US, UK and Australia
30 October 2026 · The Rosterly team · 4 min read
Overtime usually costs at least 50% more per hour than ordinary time, before on-costs. In the US, the FLSA requires time and a half for hours over 40 in a workweek. In Australia, many awards pay 150% for the first two hours and 200% after. In the UK, employers don't have to pay extra by law, but contracts often do. Ten hours of overtime at $20 an hour costs $300, not $200, before payroll taxes.
Overtime is sometimes the right answer: a short-term rush, a sick day, a skill only one person has. But when it becomes routine, it's often more expensive than another part-timer. Here's how to work out the real cost.
The rules, briefly
United States. The Department of Labor says covered, non-exempt employees must be paid at least one and a half times their regular rate for hours over 40 in a workweek. Key details:
•
the workweek is a fixed, recurring 168-hour period, and hours can't be averaged across weeks
•
the FLSA doesn't itself require extra pay for weekends or holidays unless the hours are overtime
•
some states and cities have their own, stricter rules
Australia. Overtime is set by the award or agreement. The Fair Work Ombudsman's Restaurant Award example pays overtime at 150% of the minimum hourly rate for the first two hours and 200% after that, calculated per shift. Weekend and public holiday rates vary by award.
United Kingdom. GOV.UK says employers don't have to pay workers extra for overtime. However, average pay for all hours worked must not fall below the National Minimum Wage, and many contracts set an overtime rate.
Use the overtime multiplier from the law, award or contract that applies, and your own on-cost rate.
On-costs are the employer costs on top of wages: payroll taxes, retirement contributions and insurance. In the US, the employer share of Social Security and Medicare is 7.65% of wages up to the Social Security wage base, per the IRS.
Worked example: United States
A restaurant cook earns $20 an hour and works 50 hours this week.
•
ordinary hours: 40 × $20 = $800
•
overtime: 10 × $20 × 1.5 = $300
•
wages: $1,100
•
employer Social Security and Medicare at 7.65%: $84.15
•
total: $1,184.15
Those 10 extra hours cost $322.95 including payroll taxes, or $32.30 an hour, against $21.53 an hour for ordinary time.
Worked example: Australia (Restaurant Award style)
A cook with a base rate of A$30 an hour works a shift that runs 4 hours into overtime. Using the 150%-then-200% structure:
•
first 2 hours: 2 × A$30 × 1.5 = A$90
•
next 2 hours: 2 × A$30 × 2.0 = A$120
•
overtime wages: A$210
•
super at 12%: A$25.20
•
total: A$235.20 for 4 hours, or A$58.80 an hour
The same 4 hours as ordinary time would cost about A$134.40 with super. Weekend and public holiday overtime can cost more. The rates here are illustrative; check your award.
When is overtime cheaper than another person?
Overtime makes sense when:
•
the extra work is short-term, such as a one-off event or a sick day
•
only one person has the skill and training someone else isn't worth it yet
•
the cost of finding, hiring and training a new person is more than a few weeks of overtime
Hiring or rostering another part-timer makes sense when the same overtime appears week after week. At time and a half, 10 overtime hours a week costs as much as 15 ordinary hours: enough for a regular part-time shift pattern, with less fatigue and less risk if one person is away.
Spot routine overtime before payroll does
In Rosterly, approved hours sit next to the roster, so a person creeping past their usual hours is visible every week. 14-day free trial, no card needed.
Roster to demand. Overtime often fills gaps a better base roster would cover.
2.
Set a weekly hour limit when filling shifts. Offer extra shifts to people with room in their hours first. Our guide to filling open shifts covers the order.
3.
Cross-train. If only one person can close, their overtime is built in.
4.
Approve timesheets weekly. Routine stay-backs show up as overtime at the end of the month.