Last updated: Mar 4, 2026, 3:37 PM
| Blended overtime is an overtime calculation method that only comes up when an employee works two or more different wage rates in a work week. If an employee did not record hours in two or more different wage rates, then it is more likely that one of these common overtime scenarios are applying:
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Under the Fair Labor Standards Act (FLSA), covered non-exempt employees must receive overtime pay for all hours worked over 40 in a workweek at a rate not less than time and a half their regular rate of pay.
Generally, the regular rate of pay includes all payments made by the employer to or on behalf of the employee (except certain statutory exclusions). The regular rate is determined by adding together the employee's pay for the workweek and all other earnings and dividing the total by the number of hours the employee worked in that week. If an employee is paid solely on the basis of a single hourly rate and receives no other compensation, the hourly rate is the regular rate of pay.
Blended Overtime (OT) calculates an effective rate of pay based on hours worked and all overtime-eligible compensation.
Note: The determination of earnings included in the calculations below is based upon the settings for Regular and Overtime earning codes. You may wish to review the settings for earning codes to ensure that they are set up as you have intended.
In Toast Payroll, the calculation of overtime is completed as follows:
The following are examples of scenarios that generally require a regular rate overtime calculation:
The following examples are based on the FLSA. Certain states or local jurisdictions may require the payment of a direct cash wage for tipped employees of more than $2.13 per hour and may or may not allow employers to take a tip credit against minimum wage requirements.
Some state and local jurisdictions may also have higher minimum wage requirements than the FLSA minimum wage. In those states, the employee's regular rate of pay may be higher. If you have further questions after reading these examples, please contact our Customer Care team.
Example 1: A line cook received one rate of pay ($14) for all hours worked, as well as additional OT-eligible compensation (bonus).
Example 2: A server receives a direct cash wage of $2.13 for all hours worked.
Example 3: An employee receives multiple rates of pay, spending some time working as a server ($2.13) and some time working as a host ($15). The employee also earns additional overtime-eligible compensation (mandatory gratuity given to the employee).
This can be the result of employees working at multiple rates of pay during a workweek. See example 3 above for a detailed scenario.
The reason why an overtime rate might not be 1.5 times the employee's primary position pay or if the timesheet rate keeps reverting to a different number is because blended overtime is on.
Earnings can be configured to be "overtime eligible" or not. If you need a new earning code created, please fill out this form and send it us via the blue chat dot in the lower-right corner of any Toast Payroll page.
This content is for informational purposes and is not intended as legal, tax, HR, or any other professional advice. Please contact an attorney or other professional for specific advice.