The federal government for its employees issues credit hours that is in a separate pot from PTO. You can accrue a maximum of 24 hours of credit hours at a time and it expires within a year of earning it.

If you are traveling there is a separate pot of hours Travel comp time. There is no cap on the number of hours you can earn at a time but it expires 1 year after earning it.

There are two classifications of salaried employees. Salaried exempt and Salaried eligible for overtime. There are massive lawsuits and proposed law changes going on right now because of misclassifying employees by companies. A lot of people are misclassifying salaried employees to try to skirt the federal overtime labor law by saying they are salaried exempt.

Salaried exempt is generally for management positions like executives or “white collar” workers. If you clock in and out you probably are being misclassified.

Salaried eligible for overtime is a regular employee who if they work more than 40 hrs in a week are to be paid 1.5 their rate for any hours over 40 in a given week. This is federal labor laws and has been for a very long time.

https://www.dol.gov/agencies/whd/fact-sheets/17a-overtime

To answer your question, contact your payroll provider and make sure they are classified as salaried eligible for overtime. You then have their base rate depending on their payment frequency, weekly, biweekly, monthly, etc and their overtime rate of 1.5. So the payroll processor will automatically compute the base rate, plus overtime rate and calculate taxes benefits etc.

I use Gusto and it’s super easy, they enter their times on a time tracker and it does everything from there.

That’s the point of salary. No matter their hours they make the same. No overtime pay exists because their hours aren’t counted. They get paid for expectations, Their effort and results.

Ask payroll for “additional services” designation.

When I was full time salaried, I did workshops for the company and they paid me $300 per workshop, on top of my salary on my check it had “additional services” (& of course it was taxed).

Terrific gesture on your part!

Assuming your employees are salaried/exempt, Take their annual pay, dived by 52 for their weekly pay and divide by 40 hours for their hourly equivalent wage. Multiply the hourly wage and 1.5 (for time and a half) times their additional hours. If you decide their additional pay should be based on straight time, just use their hourly wage times the number of hours.

Easiest method; Your payroll company should have an area next to each employee with their equivalent hourly wage.

For additional PTO instead of pay, just calculate hours they work and give them the equivalent for time off.

Your payroll company can confirm the tax rate (I’m pretty sure it’s the same as regular income or PTO).

Make them hourly and pay them overtime.

The point of salary is to give them a higher wage and more responsibility, but they need to work however long it takes to get it done. Of course you should consider giving them a bonus if they do something beyond their normal scope of work.

So I’ve seen this done a few ways… My favorite is to track overtime hours, and give employees time in leu, usually up to a certain maximum. I do this employees are allowed to bank up to an extra week of vacation using overtime.

I also encourage performance based profit share/bonuses for all salaried employees… This rewards people who put in that extra effort, if indirectly as if you are working over time it is usually for a critical highly visible issue/project, and if it isn’t then you probably shouldn’t have been asked to stay late.

Salaried employees don’t get overtime. But if you are still looking for a solution: take their yearly salary, divide that by total hours worked, and that will give you a rough hourly wage. Then use that to calculate the overtime. Or just cut them a bonus check for each job they accrued overtime for.