Overtime Budget Calculator
Project overtime costs and compare to hiring additional staff.
About this calculator
Chronic overtime is often a hidden signal that a team is understaffed, but the true cost only becomes obvious once it's compared against the alternative of hiring. This calculator first projects your straightforward overtime spend — hourly rate times the overtime multiplier times overtime hours times employees times weeks worked — at weekly, monthly, and annual scales, then layers on a benefits-load percentage to show the fully burdened cost once payroll taxes and benefits are included. The more useful output is the hiring comparison: it converts your total annual overtime hours into full-time-equivalent headcount (dividing by 2,080 standard annual hours), then prices out what those same hours would cost as regular-time pay for that many new hires, benefits load included.
Because overtime pay carries a multiplier above 1x while a new hire's regular pay doesn't, the burdened overtime cost is structurally always at least as expensive per hour as hiring — the savings figure captures exactly that gap. What it can't tell you is whether hiring is actually feasible: recruiting timelines, training ramp-up, office space, equipment, and management capacity all affect whether converting overtime into headcount is realistic in the short term, so use the dollar comparison as one input to that decision, not the whole answer.
Inputs
Results
Annual Overtime Cost
$225,000.00
How to Use This Calculator
- Enter the number of employees regularly working overtime.
- Set the average hourly rate and overtime hours per week per employee.
- Set the overtime multiplier (1.5× for standard FLSA time-and-a-half).
- Enter the number of working weeks per year.
- Review the weekly, monthly, and annual overtime budget.
How the result changes with Employees Working OT
| Employees Working OT | Annual Overtime Cost |
|---|---|
| 7.5 | $112,500.00 |
| 11 | $165,000.00 |
| 23 | $345,000.00 |
| 38 | $570,000.00 |
What each input means
- Employees Working OT
- Number of employees regularly working overtime.
- Average Hourly Rate
- Average regular hourly rate.
- OT Hours Per Week (each)
- Average overtime hours per employee per week.
- OT Multiplier
- Overtime pay multiplier (1.5x = time and a half).
- Weeks Per Year
- Working weeks per year (accounting for holidays).
- Benefits Load %
- Benefits and taxes as percentage of wages.
How this is calculated
Worked example, using the default values
- Identify Input Parameters4 parametersEmployees Working OT = 15, Average Hourly Rate = 25, OT Hours Per Week (each) = 8, OT Multiplier = 1.5 = 6 input(s) provided
- Calculate Annual Overtime CostAnnual Overtime Cost225000 = $225,000
- Calculate Overtime Hourly RateOvertime Hourly Rate37.5 = $37.5
- Calculate Weekly OT CostWeekly OT Cost4500 = $4,500
Engine last updated . Checked against 2 independently-derived tests — how we verify calculators. Built by Paul Gunder, a software engineer, not a licensed financial, medical, or legal professional.
Frequently Asked Questions
Why is the savings from hiring instead of paying overtime almost always positive?
Overtime pay is your regular rate multiplied by an overtime factor above 1, so a burdened hour of overtime costs strictly more than a burdened hour of regular pay for the same total hours worked — the wider the gap between your overtime multiplier and 1.0, the larger the projected savings from converting those hours to a new hire's regular-time pay instead.
Does the FTE-equivalent figure mean I could realistically replace overtime with one new hire?
It's a headcount math conversion, not a staffing recommendation — dividing your total annual overtime hours by 2,080 tells you how many standard-hours workers those overtime hours represent, but hiring, training, and ramping a new employee to full productivity takes time and carries its own costs that this calculator doesn't model.
What does the benefits load percentage actually affect?
It's applied identically to both sides of the comparison — the burdened overtime cost and the cost of hiring instead — as a percentage markup for payroll taxes, health insurance, and other benefits on top of base wages. Raising it increases both totals roughly proportionally, so it doesn't meaningfully shift which option looks cheaper, only how large both dollar figures appear.
How should I use this if overtime hours vary a lot week to week?
Enter your typical or average overtime hours per employee per week rather than a peak or worst-case number, since the calculator projects a steady-state annual cost from that single figure. If overtime is seasonal or spiky, consider running the calculator separately for peak and normal periods to get a more realistic picture than one blended average.
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