overtime premium definition

The additional amount given to employees for the overtime hours. Usually this is the "half-time" in time and one-half. For example, if an employee's hourly pay rate is $10 per hour and the employee works 41 hours in a week, the overtime premium is $5 per hour. The worker will earn $415 for the 41 hours. ($400 for 40 hours plus $10 + $5 for the one hour of overtime.) To learn more, see Explanation of Payroll Accounting.