How should overtime pay be handled on payroll?

Handling Overtime Pay on Payroll in New Hampshire

In New Hampshire, managing overtime pay on payroll requires adherence to federal and state labor standards. As of 2026, the key regulations follow the federal Fair Labor Standards Act (FLSA), which applies to most businesses in the state.

Overtime Pay Requirements

• Overtime Threshold: Employees must be paid overtime for hours worked over 40 in a single workweek.
• Overtime Rate: Overtime pay must be at least 1.5 times the employee’s regular hourly wage.
• Exempt vs. Non-Exempt Employees: Only non-exempt employees qualify for overtime pay. Proper employee classification is essential to ensure compliance.

Operational Steps for Payroll Processing

• Track Hours Accurately: Implement reliable timekeeping systems to record employee hours each workweek.
• Calculate Regular Rate: Determine the regular hourly rate, including bonuses or commissions if applicable, before applying the overtime multiplier.
• Apply Overtime Rate: Multiply hours exceeding 40 by 1.5 times the regular rate and add to the standard pay.
• Update Payroll Systems: Configure payroll software to automatically calculate and report overtime pay according to these rules.

Additional Considerations

• Recordkeeping: Maintain detailed records of hours worked and overtime payments for at least three years to meet compliance and auditing requirements.
• Payroll Taxes: Include overtime wages in taxable income when calculating federal and state payroll taxes.
• Employee Communication: Clearly communicate overtime policies and pay rates to employees to prevent misunderstandings.
• Compliance Reviews: Regularly review payroll processes and employee classifications to avoid misclassification issues and potential penalties.