Flat Sum vs. Production Bonuses

The following chart shows the difference between calculating overtime for Flat and Production Bonuses.

Bonus Type	Definition	Calculation for Overtime	Examples
Production (e.g. End of Season Bonuses based on certain goals)	Based on what an employee produces	To calculate overtime on a production bonus, the production bonus is divided by the total hours worked in the bonus earning period. This calculation will produce the regular rate of pay on the production bonus. Overtime on the production bonus is then paid at .5 times or 1 times the regular rate for all overtime hours worked in the bonus-earning period.	Employee will receive a $300 bonus if they complete the harvest season with no more than 3 unexcused absences and total production over 2,000 cartons. Because piecework paid is already a component of the production bonus, the premium rate is ½ of the average hourly rate for the bonus. This is similar to the standard overtime premium calculation method.
Flat Sum (e.g. Flat Amount Bonuses, Attendance Bonuses, Safety Bonuses, Project Completion Bonuses, Referral Bonuses, Bonuses for earning a degree or certification)	Regardless of production	Bonus must be divided by the maximum legal regular hours worked in the bonus-earning period, not by the total hours worked in the bonus-earning period. This calculation will produce the regular rate of pay on the flat sum bonus earnings. Overtime on a flat sum bonus must then be paid at 1.5 times or 2 times this regular rate calculation for any overtime hour worked in the bonus-earning period.	Employee will receive an additional $25 for working on a Saturday or otherwise meet some attendance requirement for the bonus. This bonus is not based on how much the employee produces, therefore instead of multiplying the average hour bonus premium at .5, the premium is based on 1 ½ times the calculated rate.

Bonus Type

Definition

Calculation for Overtime

Examples

Production (e.g. End of Season Bonuses based on certain goals)

Based on what an employee produces

To calculate overtime on a production bonus, the production bonus is divided by the total hours worked in the bonus earning period. This calculation will produce the regular rate of pay on the production bonus.

Overtime on the production bonus is then paid at .5 times or 1 times the regular rate for all overtime hours worked in the bonus-earning period.

Employee will receive a $300 bonus if they complete the harvest season with no more than 3 unexcused absences and total production over 2,000 cartons.

Because piecework paid is already a component of the production bonus, the premium rate is ½ of the average hourly rate for the bonus. This is similar to the standard overtime premium calculation method.

Flat Sum (e.g. Flat Amount Bonuses, Attendance Bonuses, Safety Bonuses, Project Completion Bonuses, Referral Bonuses, Bonuses for earning a degree or certification)

Regardless of production

Bonus must be divided by the maximum legal regular hours worked in the bonus-earning period, not by the total hours worked in the bonus-earning period. This calculation will produce the regular rate of pay on the flat sum bonus earnings. Overtime on a flat sum bonus must then be paid at 1.5 times or 2 times this regular rate calculation for any overtime hour worked in the bonus-earning period.

Employee will receive an additional $25 for working on a Saturday or otherwise meet some attendance requirement for the bonus.

This bonus is not based on how much the employee produces, therefore instead of multiplying the average hour bonus premium at .5, the premium is based on 1 ½ times the calculated rate.