Question 1

My team is salaried, so overtime is free. Why would it cost anything?

Accepted Answer

It is not free; it is just paid in a different currency. Salaried overtime costs nothing extra in cash, which is exactly why it is dangerous: with no line item, it runs unchecked until it shows up as burnout, mistakes, and your best people leaving. Set the pay multiplier to 1.0 for salaried, and the calculator stops counting cash and starts showing the FTE-equivalent, which is the real signal: how much of a whole extra person you are extracting for free, and cannot keep extracting.

Question 2

How does this decide whether to hire?

Accepted Answer

It converts the overtime into full-time-equivalent work, then compares the cost of sustaining that overtime against the cost of hiring someone to absorb it. When persistent overtime adds up to a meaningful fraction of a person, and especially when it is paid at a premium, hiring is often cheaper as well as healthier. The comparison makes the trade explicit instead of leaving it as a vague "we are stretched."

Question 3

Is overtime really less productive?

Accepted Answer

Consistently, yes, once it is sustained. Research going back decades finds that output per hour falls as weekly hours climb past the mid-40s, and beyond about 50 to 55 hours the additional hours produce very little. Short bursts for a genuine deadline are fine and sometimes necessary. The problem is chronic overtime, where you pay for hours that are producing progressively less while quietly raising your turnover risk.

Question 4

What overtime pay multiplier should I use?

Accepted Answer

Use 1.5 for non-exempt hourly staff who earn time-and-a-half, 2.0 where double-time applies, and 1.0 for salaried employees who are not paid extra. The multiplier only changes the cash cost. The FTE-equivalent and the burnout risk are the same regardless of whether you are paying a premium, which is the point: salaried overtime feels cheaper and is often more dangerous precisely because nothing on a report objects to it.

Question 5

What is the real cost of chronic overtime beyond the hours?

Accepted Answer

Turnover, mostly, and it is expensive. People who are consistently overworked leave, and replacing them costs far more than the overtime ever saved. There are also the harder-to-see costs: more errors in tired work, lower morale across the team, and the manager modeling that unsustainable hours are the expectation. The cash number here is the floor; the burnout and turnover risk is the part that usually makes hiring the cheaper path.

Question 6

We only need the extra hours sometimes. Do we still need to hire?

Accepted Answer

Not necessarily. Genuinely occasional overtime for real peaks is normal and does not justify a permanent hire. This calculator is for the persistent kind: the overtime that has quietly become the baseline. If your honest answer is that the extra hours happen most weeks, you are running a permanent staffing gap on borrowed energy, and the calculator shows what closing it properly would take.

What Is Overtime Really Costing You?

Keep the Overtime, or Hire?

What This Number Means for You

Frequently Asked Questions

Overtime Is a Loan. Eventually It Comes Due.