28 Jan Calculate Overtime in Alberta
You might know about oil, farming and ranching, but how to calculate overtime in Alberta? If not, then don’t worry. Just follow the steps below to find out how easy it is (with one little twist). The good news is too that if you read though this all and still aren’t sure, or just plain don’t want to do it, then you can always sign up for a free 30 day trial of Payroll Connected and let our software do the work for you!
Alberta has two kinds of overtime (but they only get one kind!)
– Daily Overtime (Over 8 hours a day)
– Weekly Overtime (Over 44 hours a week)
Overtime hours are paid at 1.5 times their regular rate of pay.
Regardless of which kind of overtime you’re calculating, start by adding up the hours worked on each day.
Calculate Overtime in Alberta: Start with Daily Overtime
To calculate daily overtime in Alberta, it’s simply any time worked in a day over 8 hours. For example, if the employee worked 10 hours, then 8 hours are Regular Pay, and the remaining 2 hours are potentially Overtime (Potentially? More about that wording later)
Go though every day and mark down any potential Daily Overtime.
Next Calculate Alberta Weekly Overtime
Now that the Daily Overtime Hours have been removed from the Regular Hours, add up the remaining Regular Hours for the week (Sunday to Saturday typically) and see if those remaining Regular Hours are over 44 hours in the week. If so, then any hours over 44 are the potential (there’s that word again!) Weekly Overtime hours.
Now The Twist
Compare the amount of Daily Overtime Hours and the amount of Weekly Overtime for the week.
Whichever number is greater is the overtime the employees get.
The smaller number of hours get converted back to regular wages.
Unfair? Maybe. But that’s how the labour standards are, so that’s how it gets calculated.
Here’s some examples to hopefully clear things up:
Example 1:
| Day | Worked | Reg | OT | |
| Mon | 8 | = | 8 | |
| Tue | 9 | = | 8 | 1 |
| Wed | 7.5 | = | 7.5 | |
| Thu | 10 | = | 8 | 2 |
| Fri | 8 | = | 8 | |
| Totals: | 39.5 | 3 |
Total Daily Overtime = 3 hrs. Total Reg hours = 39.5 (no weekly overtime)
This employee is paid 39.5 hours Regular and 3 hours Overtime rate.
Example 2:
| Day | Worked | Reg | OT | |
| Sun | 5 | = | 5 | |
| Mon | 9.5 | = | 8 | 1.5 |
| Tue | 8 | = | 8 | |
| Wed | 8.5 | = | 8 | 0.5 |
| Thu | 10 | = | 8 | 2 |
| Fri | 8 | = | 8 | |
| Fri | 6 | = | 6 | |
| Totals: | 51 | 4 |
Total Daily Overtime = 4 hrs
Total remaining Regular = 51 hrs, which is greater than 44 hours, so 7 hours are converted to Weekly Overtime and the remainder is 44 hours Regular.
Now we compare the two types of overtime. Because there’s 7 hours of Weekly Overtime but only 4 hours of Daily Overtime, the Overtime this employee will be paid is 7 hours, and the daily overtime gets converted back to regular pay. So they’ll get 48 hours of regular pay.
Is it Worth Your Time to Calculate?
Although calculating overtime in Alberta is doable, it can be time consuming or confusing. If in doubt, then you can always give Payroll Connected a try and let our software do the heavy lifting for you (automatically!).
Photo by Fabio Santaniello Bruun on Unsplash