What is a Blended Wage Rate?

When an employee has multiple wage rates (e.g., different roles like Barista and Shift Lead), Homebase uses a blended wage rate to calculate PTO and Overtime. This approach is compliant with Department of Labor (DOL) regulations, which require a fair calculation using a weighted average of wages worked in a single workweek.

Note: Blended wage calculations are based on Work Week settings, not Pay Periods.

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When Is a Blended Rate Used?

• A blended rate is used only if the employee works more than one wage rate during the same workweek.
• Applies to both Overtime (OT) and Paid Time Off (PTO).
• If the employee does not work multiple roles, their default wage rate is used for PTO.

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PTO Calculation Using Blended Wage Rates

Say an employee’s default role is Barista at $14/hour, with a secondary role as Shift Lead at $17/hour.

How to Calculate

During the work week, the employee worked 20 hours as a Barista, 10 hours as a Shift Lead, and submitted 10 hours of PTO.

Since the employee worked two different roles (and wage rates) during the same work week, Homebase calculates PTO using a blended wage rate. This is a weighted average of the wages earned based on the hours worked for each role.

1. Calculate earnings per role
   1. 1Barista pay: 20 hours × $14 = $280
   2. Shift Lead pay: 10 hours × $17 = $170
2. Add total regular pay
   1. $280 + $170 = $450
3. Calculate blended rate and PTO pay
   1. Total hours worked: 30 hours
   2. Blended rate: $450 ÷ 30 = $15/hour
   3. PTO pay: 10 hours × $15 = $150

In this scenario, PTO Pay would be $150 using the blended rate of $15/hour.

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Overtime Calculation Using Blended Wage Rates

Say an employee’s default role is Barista at $18/hour, with a secondary role as Shift Lead at $20/hour.

How to Calculate

1. Calculate total pay for each wage rate
   1. $18/hour: 36.37 hours × $18 = $654.66
   2. $20/hour: 7.25 hours × $20 = $145
2. Add total pay and total hours worked
   1. Total pay: $654.66 + $145 = $799.66
   2. Total hours worked: 36.37 + 7.25 = 43.62 hours
3. Calculate the blended rate and overtime premium
   1. Weighted average rate: $799.66 ÷ 43.62 = $18.33/hour
   2. Overtime premium (50%): $18.33 × 0.5 = $9.165

In this scenario, the Overtime Blended Wage rate is $9.17 added to the regular wage rate for any hours worked after the overtime threshold.

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How can I see my employee's blended wage rate was calculated?

You can see a breakdown of your employee's blended wage rate by:

1. Go to Pay
2. Begin a Payroll run 
3. On the Hours & time off section click on the specific employee's wage rate under the Wage rate column (only if it is highlighted with a link)

 

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Important to Note

• Blended wage rates ensure fair pay across multiple roles in a single workweek.
• PTO and OT are calculated using this method only when multiple wage rates are worked during the same workweek.
• This method supports compliance with federal labor law and helps maintain payroll accuracy.