{"id":129648,"date":"2022-12-27T07:00:00","date_gmt":"2022-12-27T07:00:00","guid":{"rendered":"https:\/\/www.aihr.com\/?post_type=hr-glossary&#038;p=129648"},"modified":"2023-10-19T12:33:38","modified_gmt":"2023-10-19T12:33:38","slug":"premium-pay","status":"publish","type":"hr-glossary","link":"https:\/\/www.aihr.com\/hr-glossary\/premium-pay\/","title":{"rendered":"Premium Pay"},"content":{"rendered":"\n<h2 class=\"wp-block-heading\" id=\"h-what-is-premium-pay\">What is premium pay?<\/h2>\n\n\n\n<p>Premium pay refers to increased compensation that may be provided to an employee for a variety of reasons:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Working what are typically less desirable hours or days, such as holidays or weekends<\/li>\n\n\n\n<li>Last-minute changes to an employee&#8217;s schedule, be that location or shift time, particularly when the employee is not consulted prior to the change<\/li>\n\n\n\n<li>Night shift, if not part of the employee\u2019s regular schedule<\/li>\n\n\n\n<li>Call-back, which refers to when an employee is asked to work during a workplace emergency<\/li>\n\n\n\n<li>Hazard pay, which is offered when the work environment involves challenging circumstances, such as direct exposure to hazardous chemicals<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-image size-full\"><a href=\"https:\/\/www.aihr.com\/wp-content\/uploads\/Types-of-Premium-Pay.png\" target=\"_blank\" rel=\"noreferrer noopener\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"680\" src=\"https:\/\/www.aihr.com\/wp-content\/uploads\/Types-of-Premium-Pay.png\" alt=\"Types of Premium Pay\" class=\"wp-image-129655\" srcset=\"https:\/\/www.aihr.com\/wp-content\/uploads\/Types-of-Premium-Pay.png 1024w, https:\/\/www.aihr.com\/wp-content\/uploads\/Types-of-Premium-Pay-300x199.png 300w, https:\/\/www.aihr.com\/wp-content\/uploads\/Types-of-Premium-Pay-768x510.png 768w, https:\/\/www.aihr.com\/wp-content\/uploads\/Types-of-Premium-Pay-510x339.png 510w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/a><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-how-do-i-calculate-premium-pay\">How do I calculate premium pay?<\/h2>\n\n\n\n<p>Depending on the job and the type of hours worked, the rate of the premium has to be determined. Usually, the premium rate may not be less than one and one-half times the normal rate for an employee. This, of course, is dependent on the regulations of your state, city, county, or company.&nbsp;<\/p>\n\n\n\n<p>For example, if an employee is asked to work on a Sunday (which is usually their day off), the calculation would be as follows:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Monthly salary = $2,000<\/li>\n\n\n\n<li>Premium rate = 60%<\/li>\n<\/ul>\n\n\n\n<p>Now, calculate the day rate:<\/p>\n\n\n\n<p class=\"has-text-align-center\"><em>$2,000 \/ 21 days (the number of working days in a month) = $95.24 (Daily Rate)<\/em><\/p>\n\n\n\n<p>Then multiply the daily rate by the premium rate:<\/p>\n\n\n\n<p class=\"has-text-align-center\"><em>$95.24 x 60% = $57.14<\/em><\/p>\n\n\n\n<p>Therefore, the premium rate is:&nbsp;<\/p>\n\n\n\n<p class=\"has-text-align-center\"><em>$95.24 + $57.14 = $152.38<\/em><\/p>\n\n\n<div class=\"gaihrpl gaihrpl-29\"><div class=\"gaihrpl-single aaihrpl-146\"><a class=\"gofollow\" data-track=\"MTQ2LDI5LDYwMA==\" href=\"https:\/\/www.aihr.com\/courses\/compensation-benefits-certification\/?il_id=banner&#038;il_name=cbcp&#038;il_creative=cbcp-value&#038;il_position=slot2\" target=\"_blank\" rel=\"nofollow\" style=\"display:block;padding-top:20px;\"><img decoding=\"async\" src=\"https:\/\/www.aihr.com\/wp-content\/plugs\/podcast-blog-ads-fade.jpg\" srcset=\"https:\/\/www.aihr.com\/wp-content\/uploads\/CBCP-Banner-Value.png 360w, https:\/\/www.aihr.com\/wp-content\/uploads\/CBCP-Banner-Value.png 360w, https:\/\/www.aihr.com\/wp-content\/uploads\/CBCP-Banner-Value.png 700w, https:\/\/www.aihr.com\/wp-content\/plugs\/ w\" sizes=\"(max-width: 480px) 360px, (max-width: 960px) 360px, (max-width: 1280px) 700px, 750px\" style=\"box-shadow: 0px 0px 20px 5px rgb(46 61 73 \/ 15%);display: block;margin: auto; border-radius:19px;\" class=\"small_ad\" \/><\/a>\r\n<br><\/div><\/div>\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-s-the-difference-between-premium-pay-and-overtime-pay\">What\u2019s the difference between premium pay and overtime pay?<\/h2>\n\n\n\n<p>Premium pay is paid for work done during less than desirable hours or work done on special days. Overtime pay is paid when an employee works beyond the usual 40-hour workweek. If an employee is a member of a union, the collective bargaining agreement between the company and the union often will dictate the premium pay calculations and the circumstances in which it will apply.<\/p>\n","protected":false},"parent":0,"menu_order":0,"template":"","hr_glossary_category":[575],"class_list":["post-129648","hr-glossary","type-hr-glossary","status-publish","hentry","hr_glossary_category-compensation-benefits","description-off"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.4 (Yoast SEO v27.4) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>What is Premium Pay? | HR Glossary - AIHR<\/title>\n<meta name=\"description\" content=\"Organizations offer premium pay to compensate employees for working typically less desirable hours or days, and other reasons.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.aihr.com\/hr-glossary\/premium-pay\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Premium Pay\" \/>\n<meta property=\"og:description\" content=\"Organizations offer premium pay to compensate employees for working typically less desirable hours or days, and other reasons.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.aihr.com\/wp-json\/wp\/v2\/hr-glossary\/129648\" \/>\n<meta property=\"og:site_name\" content=\"AIHR\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/analyticsinhr\/\" \/>\n<meta property=\"article:modified_time\" content=\"2023-10-19T12:33:38+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.aihr.com\/wp-content\/uploads\/Types-of-Premium-Pay.png\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:site\" content=\"@AnalyticsinHR\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.aihr.com\\\/hr-glossary\\\/premium-pay\\\/\",\"url\":\"https:\\\/\\\/www.aihr.com\\\/hr-glossary\\\/premium-pay\\\/\",\"name\":\"What is Premium Pay? 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