In the weekly payroll example, what is the overtime premium per hour used in the calculation?

• A. $10.50 per hour
• B. $4.50 per hour
• C. $5.25 per hour
• D. $6.00 per hour

Answer: (C)

Overtime premium per hour is the extra amount paid for each hour of overtime, i.e., the overtime rate minus the regular rate. When overtime is paid at time-and-a-half, the premium equals half the regular hourly rate.

In the weekly payroll example, the regular rate used is $10.50 per hour. Half of that is 0.5 × 10.50 = 5.25. So the overtime premium per hour is $5.25. This matches the calculation for overtime at time-and-a-half.

The other values don’t fit because they don’t represent half of the regular rate given in the example (they would correspond to the regular rate itself or to a different regular rate altogether).