Overtime vs Added Shift Cost Calculator
When a bottleneck is short of hours, overtime is quick but expensive and a new shift is slower to arrange. This calculator compares the weekly cost of each and shows where the lines cross.
Your numbers
Required machine hours minus available hours at the bottleneck.
Fatigue and short notice often cut output in overtime.
Your results
A cost comparison only. Ignores hiring time, training, quality effects, labor-law limits and union rules. Verify with HR and finance.
Weekly cost versus shortfall hours
Sweeps Weekly machine-hour shortfall from 4 to 200, holding your other inputs fixed.
Capacity model on your ERP data
Optional: a review of modelling shortfall and labor cost from live ERP load.
Optional. The tool and every export work without this. No spam.
How to use it
Enter the weekly machine-hour shortfall at the bottleneck, crew size, base wage and the overtime multiplier. Add the productivity you expect from overtime and from a new shift, plus the shift differential and fixed cost per added shift. The results show the weekly cost of both options, and the chart sweeps the shortfall so you can see the break-even point.
The method
Overtime cost equals the shortfall divided by overtime productivity, times crew, times wage, times the multiplier. Added shift cost equals the number of shifts needed times the labor for one shift with differential, plus fixed cost. Shifts needed is the shortfall divided by productive hours per shift, rounded up. Small shortfalls favor overtime because a shift has a fixed cost. Large, recurring shortfalls favor the shift.
- Overtime has a lower fixed cost but a higher hourly rate.
- An added shift has fixed overhead and a ramp-up period.
- Both fall in value if the machine is not the real bottleneck.
Reading the result
If the difference is positive, the added shift is cheaper at that shortfall. Check how long the shortfall will last. For two or three weeks, overtime is typically the practical choice even if it costs more. For a quarter or more, recruiting and training for a shift often pays. Run the numbers at the low and high end of your expected demand.
Common mistakes
Do not apply overtime to non-bottleneck work. Do not forget that overtime productivity drops across consecutive weeks. And do not assume a second shift reaches full productivity in week one; new crews need ramp-up time and supervision.
Frequently Asked Questions
Does this include payroll taxes and benefits?
Not directly. Increase the base wage to a loaded rate if you want employer costs included, though some benefits do not scale with overtime hours.
Why does the added shift cost jump in steps?
Shifts are whole units. Even a small extra shortfall that exceeds one shift's productive hours requires a second shift, so cost steps up.
What if overtime is limited by law?
Then the model overstates overtime's availability. Check local limits on weekly hours and rest periods and use the added shift option when limits bind.
Should I consider outsourcing?
Yes, as a third option for short peaks. Compare the outsourced unit price plus freight against the cost per unit here.
If you want this comparison driven by your actual ERP load and labor rates, we can connect the model to your data.
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