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This is the most common method for salaried employees.įor example, guards who work the second shift still earn $15 per hour, leaving them with $120 in gross pay ($15 x 8 hours).
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You add a flat payment to an employee’s pay without adjusting the basic hourly rate. As a dollar amount per shiftįinally, you can give a lump sum differential payment for second and third shifts. A guard whose basic rate is $25 per hour has a premium rate of $30 per hour. The premium rate for a guard with a basic $15 per hour rate makes $20 per hour on the second shift. You can offer a standard $5 increase for second shift hours and a $10 increase on third shift hours. Let’s say your guards are paid at rates commensurate with experience. That way, employees with different hourly rates receive the same premium on irregular shifts. While most businesses pay shift differentials as a percentage of an employee’s basic rate, you can express the differential as a dollar amount. An overnight guard makes $18 per hour ($15 basic rate x 1.2 shift differential). earns $16.50 per hour ($15 basic rate x 1.1 shift differential). The jewelry store offers a 10% differential for second shift hours and a 20% differential for overnight hours (a night differential).Ī guard who works from 3 p.m. Let’s say you own a jewelry store with a 24/7 security guard. Shift differentials come in three forms: a percentage of basic hourly pay, a dollar amount per hour, or a dollar amount per shift. Shift differentials don’t differ by employee: When you offer differential pay, you offer it to all employees who work those hours.ĭon’t confuse shift differentials with overtime pay, which is federally mandated and kicks in when a non-exempt employee works more than 40 hours in a standard workweek. Employers decide the amount of shift differential pay. Shift differentials are not legally required, but they’re a common perk given to employees who agree to work at odd hours or on holidays. You calculate shift differentials in step three of the payroll process, which calculates gross wages. Since it can be less desirable to work the graveyard shift or weekend shifts, employers incentivize their workforce with a premium hourly rate. Shift differential refers to additional compensation for employees who work outside their normal work hours.
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What can you do to make them raise their hands enthusiastically? Shift differential pay. They all just look at you with blank stares. You ask three of your trusty employees to work an overnight shift to restock the store for the next day. You’ve extended your business hours for last-minute shoppers. Picture this: It’s the holiday season, and inventory is flying off the shelves at your store.
Shift coverage calculator how to#
We explore how to calculate them and the most common questions about the process. Shift differential pay incentivizes employees to pick up shifts at irregular times of day.
![Shift coverage calculator](https://kumkoniak.com/42.jpg)