What a $1-an-Hour Raise Is Really Worth on a 12-Hour Shift Schedule (Annual Pay Math by Schedule)

"We're giving everyone a dollar-an-hour raise." It sounds the same in every break room, and it is not the same amount of money. A raise is quoted per hour. You are paid for a number of hours per year, and that number depends on the schedule you work.

The shortcut most online calculators and coworkers use is a dollar times 2,080, the hours in a standard 40-hour, 52-week year. That is correct for a 5x8 schedule and wrong for almost everyone else in this blog's audience.

The formula

Yearly value of a raise = raise per hour x paid hours per year

Two details inside "paid hours":

• Paid hours, not scheduled hours. An unpaid meal break doesn't count. Paid time off does count if your employer pays it at your current rate, because a PTO hour is still a paid hour.
• Overtime hours count extra. Federal overtime is at least one and one-half times the regular rate, so a raise to the base rate is worth 1.5 times as much on every overtime hour. More on that below.

The straight-time math, schedule by schedule

First pass: no overtime, no unpaid time off, a flat dollar raise of $1.00 per hour.

The 3 x 12 line is the one that surprises people. Three 12-hour shifts is 36 hours a week, which is 1,872 hours across 52 weeks. A $1 raise is worth $208 a year less than the same raise on a 5x8 schedule, even though the shifts feel like "full time." (If you want to see how FTE numbers translate into shifts per pay period, we walked through that in what a 0.9 vs 0.8 FTE means in 12-hour shifts.)

Check your own number against the stub: add up the hours paid over a few pay periods, scale to 26 periods, and use that instead of the table.

When your schedule runs over 40: the 4-on-4-off example

A 4-on-4-off rotation averages 3.5 twelve-hour shifts a week, which is 42 hours, or about 2,190 hours a year. Whether those extra hours are overtime depends on how your employer counts them.

Here is one common setup as an example. Say overtime is counted over 40 hours in a fixed workweek. Then roughly half your weeks have four shifts (48 hours, 8 of them overtime) and half have three shifts (36 hours, no overtime).

• Overtime hours: about 26 weeks x 8 = 208 per year
• Straight-time hours: 2,190 - 208 = 1,982
• Value of a $1 raise: 1,982 x $1.00 + 208 x $1.50 = $2,294

Another way to get the same number: 2,190 hours x $1 = $2,190, plus the extra half-dollar on 208 overtime hours = $104, total $2,294.

If your employer uses a different system, such as an 8-and-80 arrangement in a hospital or the special work-period rules some fire departments use, the overtime hours (and the answer) change. The same method still works: separate your yearly hours into straight-time and overtime, and pay the raise at 1x and 1.5x.

Picking up extra shifts

This is where the raise gets quietly bigger for people who like extra shifts. Take a 3 x 12 worker (36 hours a week) who picks up one additional 12-hour shift in a week. Under the standard weekly rule, that week becomes 48 hours: 40 straight-time hours and 8 overtime hours. Compared with the base 36-hour week, the extra shift adds 4 straight-time hours and 8 overtime hours.

If that happens once every pay period (26 times a year):

• Extra shift value of a $1 raise: 26 x (4 x $1.00 + 8 x $1.50) = 26 x $16 = $416
• Plus the base year: $1,872
• Total: $2,288

That's more than a raise on a flat 40 hours every week. The overtime rate rides on the raised base, which is the same reason the weighted average overtime calculation matters when you have more than one rate in a week. The federal rule is that overtime must be paid at no less than one and one-half times the regular rate for hours over 40 in a workweek, and the regular rate is total pay for the week divided by hours worked (DOL Fact Sheet #23; 29 CFR § 778.109). A higher base rate therefore pushes both numbers up.

Does a dollar raise also raise your differential?

It depends on how your night differential is written:

• Percentage differential (say, 10% of base). A $1 raise to base adds another $0.10 on every differential hour. On a night schedule the effective raise is $1.10 an hour.
• Flat-dollar differential (say, $3.00 an hour). A base raise doesn't change it. The effective raise stays $1.00.

Check your pay policy or contract for which kind you have. If you work nights and the differential is a percentage, a raise is worth a little more than the headline number on every hour inside the night window.

Running it backward

Sometimes you know the yearly number you want or were told. Divide it by your paid hours to get the hourly equivalent.

Say a job offer or a union proposal is worth $5,000 a year:

• On a 5x8 schedule: $5,000 / 2,080 = $2.40 an hour
• On a 3x12 schedule: $5,000 / 1,872 = $2.67 an hour

The 12-hour worker needs a raise about 11% larger per hour to land at the same yearly figure, again because there are fewer paid hours to spread it over. This is also why a per-hour comparison between two job offers can mislead when one offer is a 36-hour schedule and the other is 40 (the 24-hour-shift version of the same problem is in how to calculate your real hourly rate on a 24-hour shift schedule).

What these numbers leave out

• It is before taxes. The pre-tax raise is not the same as the change in your take-home.
• Effective dates matter. A raise that starts mid-pay-period, or applies from a date earlier than the day it was announced (back pay), only counts for the hours worked after it takes effect.
• Unpaid days reduce the total. Unpaid leave, unpaid holidays or hours you chose not to work come off the "paid hours per year" figure.
• Some pay is not tied to your base rate. Flat per-shift pay, stipends and some bonuses don't scale with a raise. (Certain bonuses do enter the regular rate used for overtime; that's covered in the non-discretionary bonus overtime recalculation post.)

A quick check before you celebrate or complain

1. Count your paid hours for the last 3 to 6 pay periods and get a yearly estimate (hours per period x 26).
2. Multiply by the raise. Add the extra half on any hours you expect to be overtime.
3. Compare with the headline. If you are on 36 hours a week, expect about 90% of what a 5x8 coworker gets from the same hourly raise.
4. Check that the first stub after the raise shows the new rate on regular, overtime and differential lines.

A shift calendar helps with step 1: seeing the real count of shifts in a year or a pay period instead of guessing from memory. Duty Pals, a shift calendar for Android, is now on Google Play, and the free shift pattern calculator on this site will lay a rotation out against the calendar so you can count shifts per pay period.

Pay rules vary by employer, state and union contract. This is a general explanation of how an hourly raise converts to a yearly figure, using the federal overtime rule as the baseline, not advice about your specific pay. Your employer's written pay policy, your state labor department and a licensed employment attorney are the authorities on your situation. Federal references: DOL Fact Sheet #23 and 29 CFR § 778.109.