What is premium pay?

Premium pay is additional monetary compensation, over and above the standard salary, given to employees who regularly work extra hours during their regular working schedule. It is a kind of premium pay, which is added to employees’ regular wages for giving the services not included in their daily routine. They are paid for specific projects or simply for overtime.

What are the types of premium pay?

• Overtime pay: It is compensation for hours worked beyond the standard 8-hour workday.
• Holiday / weekend pay: The work performed on particular days which is considered as designated holidays or weekends.
• Night / shift differentials: This is for less desirable hours that is not a part of an employee’s fixed schedule
• Hazard pay: Extra pay is offered when the work environment involves hazardous or dangerous substances
• Call-back pay: Some employees are requested to come back to work in case of workplace emergency

Premium Pay – FAQs

What does premium mean for work?

The term “premium” refers to the additional compensation offered to the employees when requested to work on certain days or less desirable conditions. This premium pay is intended to reward employees for going above and beyond their associated work hours under specific circumstances.

Difference between premium pay and regular bonus?

Premium pay primarily serves as the compensation given to the employees for working under non-standard hours or conditions. It is calculated based on a set formula predetermined by the company policies. Whereas regular bonuses, often subjective, are awarded to the employees based on performance indicators in order to raise their productivity levels.