How to Calculate Shift Differential Pay
Shift rate = Base rate + Differential
Percentage differential = Base rate × Differential %
A 10% differential on $24 is $2.40 an hour. Weekly differential pay = differential × hours worked on the shift.
Shift Differential and Overtime
The FLSA counts a shift differential in the regular rate used for overtime. The regular rate is total straight-time pay ÷ total hours, and overtime pays half that rate on top for each hour over 40.
A 48-hour week with 24 differential hours has a regular rate of $25.25, not $24, and pays $1,313 for the week.
Typical Shift Differentials
No federal law requires a shift differential. Employers set differentials by policy or union contract, most often for night shifts, evening shifts, weekends and on-call hours in hospitals, manufacturing, warehouses and security.
The Overtime Calculator handles overtime without a differential.
Percentage Shift Differential Example
A percentage differential pays a share of the base rate on top of it for every shift hour, so it rises with every raise. A flat dollar differential stays the same until the policy changes.
A 10% night differential on a $24 base rate adds $2.40 an hour, for a shift rate of $26.40 / h. A full 40-hour week of nights earns $96 extra this week, or $4,992 a year, and weekly gross pay of $1,056.
Night Shift Pay at Common Differentials
The table shows what different differentials add to a $24 base rate for a worker with 24 night hours in a 40-hour week.
| Differential | Shift rate | Extra per week | Weekly gross |
|---|---|---|---|
| $1 an hour | $25 / h | $24 | $984 |
| $2 an hour | $26 / h | $48 | $1,008 |
| $3 an hour | $27 / h | $72 | $1,032 |
| 5% | $25.20 / h | $28.80 | $988.80 |
| 10% | $26.40 / h | $57.60 | $1,017.60 |
| 15% | $27.60 / h | $86.40 | $1,046.40 |
The figures are gross, before tax. Change the night hours in the calculator to match your own rotation.
Overtime With a Shift Differential, Step by Step
Overtime with a differential is figured on the blended regular rate of all straight-time pay for the week, then half of that rate is added for each hour over 40.
| 48-hour week, 24 night hours | Gross |
|---|---|
| Base pay (48 h × $24) | $1,152 |
| Shift differential (24 h × $2.50) | $60 |
| Overtime premium (8 h × $12.63) | $101 |
| Weekly gross pay | $1,313 |
The regular rate is $25.25: straight-time pay divided by 48 hours. Paying overtime on the $24 base rate alone would underpay every overtime hour of the week.
Which Hours Earn the Differential
The employer's policy decides whether the differential applies only to hours inside a set window or to the whole shift.
- Window rule: only hours worked between set times, such as 23:00 to 07:00, earn the differential.
- Majority rule: the whole shift earns it when most of the hours fall in the night window.
- Whole shift by assignment: anyone on the night roster earns it for every hour of the shift.
Enter only the hours that earn the differential in "Differential hours / week". The Time Card Calculator totals the hours from clock times.
Weekend, Holiday and On Call Pay
Weekend and holiday premiums are treated like a shift differential unless they pay at least 1.5 times the base rate. A premium of 1.5 times or more for Saturday, Sunday or holiday work can stay out of the regular rate and count toward overtime owed (29 CFR 778.203).
On-call time is paid when the worker is "engaged to wait", such as staying at the workplace, and is generally unpaid when the worker can use the time freely at home (29 CFR 785.17). A flat on-call stipend still counts in the regular rate.
How Shift Differential Pay Is Taxed
Shift differential is regular wages, taxed and withheld together with base pay. It is not a supplemental wage like a bonus.
A worker on $24 an hour with 24 night hours at a $2.50 differential earns $3,120 a year more gross. For a single filer with no state income tax, yearly take-home pay rises from $42,290.72 to $44,797.64. Federal tax, Social Security and Medicare take part of every extra dollar.
Frequently Asked Questions
How do you calculate a shift differential?
You calculate a shift differential by adding the differential to the base rate, or multiplying the base rate by the differential percentage. $20 plus 15% is $23 an hour.
Is shift differential included in overtime?
Yes. Under the FLSA the shift differential is part of the regular rate, so overtime pay includes it.
Is shift differential required by law?
No. No federal law requires shift differential pay. It comes from employer policy or a union contract.
How do I calculate a 10% shift differential?
You calculate a 10% shift differential by multiplying the base rate by 0.10 and adding it. On $24 that is $2.40 extra, for $26.40 / h.
Is shift differential taxed differently?
No. Shift differential is taxed as regular wages with the rest of the paycheck, not at the 22% supplemental rate.
Is a flat or a percentage differential better?
A percentage differential grows with every raise; a flat amount does not. At a low base rate a flat amount can pay more, so compare both in the calculator.
Is the shift differential paid on PTO and holidays?
Only if the employer policy or union contract says so. Federal law does not require a differential on paid time off.
Does weekend premium pay count in the overtime rate?
A weekend premium of at least 1.5 times the base rate can be left out of the regular rate. A smaller premium counts in it, like a night differential.