Compare the cost of covering additional workload with overtime against adding employee capacity, including hiring cost, paid nonproductive time, and ramp productivity.
About this analysis
The analysis applies the same incremental workload to both choices, separates recurring from one-time hiring cost, and records every assumption used. For more information, visit our labor cost optimization consulting page.
Federal starting rule: for covered, nonexempt employees, FLSA overtime is at least 1.5 times the regular rate after 40 hours in a workweek. State or local rules may require a higher standard.
Enter the recurring productive hours that must be covered during the selected period.
Enter the economics of one added employee and the productive capacity available during the comparison period.
Required workload
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Productive hours in period
Overtime cost
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Hiring cost
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Cost difference
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Both alternatives are compared against the productive hours entered above. Hiring cost includes the employee capacity required to cover those hours after paid unavailable time and ramp productivity.
What the calculation shows
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For more information, visit our labor cost optimization consulting page.
ILLUSTRATIVE CALCULATION RECORD — OVERTIME VS HIRING COST Overtime rule: U.S. federal FLSA starting rule — 1.5× after 40 hours/week Workload duration: 26.00 weeks Additional productive hours per week: 30.00 Employees sharing overtime: 3 Regular hourly rate: $30 Overtime multiplier: 1.50× Employer burden on overtime wages: 8.0% NEW-HIRE ASSUMPTIONS Annual base salary: $62,400 Employer burden / benefits: 30.0% Recruiting + onboarding cost: $7,500 Paid hours per week: 40 Paid unavailable hours per year: 208 Ramp period: 8.0 weeks Average ramp productivity: 60.0% ILLUSTRATIVE RESULTS Required productive hours: 780 Overtime cost: $37,908 Employee capacity required: 0.95 FTE Hiring option cost for period: $45,671 Cost difference (overtime minus hiring): −$7,763 Annualized recurring employee cost per FTE: $81,120 This illustrative record exists to make the calculation structure, terminology, and evidence trail crawlable. JavaScript replaces these values with the visitor’s current inputs. This is a planning comparison based on entered assumptions. It is not a legal determination of overtime eligibility or wage obligations.
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