Overtime vs Extra Shift: Which Costs Less for the Capacity Gap?
When the schedule needs more hours than the crew has, the usual answers are overtime or another shift. Overtime is flexible but expensive and tiring. A shift is cheaper per hour but comes with fixed cost and a minimum size. This calculator shows where the lines cross.
Your numbers
Required direct hours minus available straight time hours.
Output per paid overtime hour is lower than straight time because of fatigue and extended weeks.
Supervision, utilities, quality coverage and material handling support.
Your results
Excludes hiring, training and ramp up cost, benefits for new headcount, and any legal limits on overtime hours. Local labor rules and union agreements vary.
Weekly cost vs hours short
Sweeps Weekly labor hours short from 0 to 400, holding your other inputs fixed.
Feed real scheduled load into this comparison
Optional: we can show how scheduled hours from your ERP could drive the weekly labor gap automatically.
Optional. The tool and every export work without this. No spam.
How to use it
Start with the weekly gap: required direct labor hours from the schedule minus the straight time hours you have. Enter the base wage, the overtime multiplier and a realistic productivity loss for long weeks. Then describe the extra crew you would run: its size, paid hours, shift differential and the fixed cost that comes with opening another shift. The chart sweeps the gap so you can see how the answer moves if the forecast changes.
- Take the gap from finite capacity or MRP load, not a guess
- Use the productivity loss your own data shows
- Include supervision and support in the fixed cost
- Run the chart across your best and worst demand cases
The formulas
Paid overtime hours = gap / (1 - fatigue). Overtime cost = paid hours times wage times multiplier. For a shift, productive hours per crew = crew size times paid hours, crews = rounded up gap divided by that, and shift cost = crews times (crew hours times wage times (1 + differential) + fixed cost). The shift has a step shape because crews come in whole numbers, which is why the lines can cross more than once.
Reading the result
Overtime wins for small and short lived gaps. The extra shift wins when the gap is large enough to fill most of a crew and lasts long enough to justify the fixed cost. A shift that would be half empty rarely beats overtime. Also weigh what the numbers leave out: overtime burns out your best people, while a new shift needs hiring and time to reach full productivity.
Common mistakes
Treating overtime as a time and a half cost and nothing more ignores fatigue, quality escapes and absenteeism. Comparing a full crew cost with a partial gap overstates the shift. And using last quarter's gap as a permanent figure leads to a shift being opened for a peak that has already passed.
Frequently Asked Questions
How much productivity do you lose on overtime?
It varies with the work and the length of the week. Studies and plant experience commonly show noticeable losses beyond about 50 hours a week. Use your own output per hour data if you have it, and a range of 5 to 15 percent as a starting assumption.
Does this include benefits and payroll taxes?
Only if you build them into the wage input. Use a burdened wage for the shift, since new headcount carries full benefits, but straight overtime on existing staff often carries only payroll tax on the premium.
What if the gap is temporary?
Short gaps favour overtime or temporary labor because the fixed cost and ramp up of a shift cannot be recovered. Check how many weeks the gap lasts and add hiring and training cost to the shift side before deciding.
Why is the shift line stepped?
Crews are whole units, so cost jumps each time the gap needs another crew. The chart shows this as steps. Overtime, by contrast, rises smoothly with every extra hour.
We can connect scheduled load from your ERP to this kind of comparison so the gap is computed from real work orders, not an estimate typed into a spreadsheet.
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