How to Calculate On-Call Pay from PagerDuty

On call pay sounds straightforward until you sit down to actually calculate it. Most organisations combine several different components — and PagerDuty, while excellent at scheduling, doesn't produce a payroll-ready number on its own. This guide walks through exactly how on call pay is calculated and where PagerDuty fits into that process.

The three components of on call pay

Most on call pay policies combine some or all of the following. Understanding each one separately makes the maths much cleaner.

1. Availability stipend

A flat daily or weekly rate paid simply for being on the rota — regardless of whether the engineer is actually paged. The logic is that being on call restricts freedom (no drinking, must stay within a certain response time), so the engineer is compensated for availability itself. For example, a team might pay one rate for weekdays and a higher rate for weekends and bank holidays — the exact amounts vary considerably by company, country, and seniority.

2. Callout fee

A fixed fee triggered each time the engineer is actually paged and responds to an incident. This is separate from the stipend — it compensates for the disruption of being woken up or interrupted, not just for being available. The amount varies by organisation and policy. Some policies also apply a minimum-hours rule: if the callout takes less than one hour of actual work, it still pays as if it took one hour.

3. Hourly work rate

For incidents that involve significant active work — triaging, coordinating a response, writing an incident review — some policies pay an hourly rate on top of the callout fee. This is typically calculated from the time the alert fires to the time the incident is resolved.

What PagerDuty actually gives you

PagerDuty knows who was on call and when, and it records every incident — when it fired, when it was resolved, and who responded. That's genuinely useful data.

What it does not give you is a pay figure. PagerDuty has no knowledge of your stipend rates, callout fees, or public holiday calendar. It can't tell you whether a given day was a bank holiday in your region, and it won't apply your minimum-hours rule or business hours exclusions. That calculation has to happen outside PagerDuty — and that's where most teams run into trouble.

What the manual process actually involves

If you were to calculate this by hand each month, here's what you'd need to work through for every engineer:

1. 1Identify every day the engineer was on call during the reporting period and classify each as a weekday, weekend day, or public holiday.
2. 2Multiply the count of each day type by the corresponding stipend rate and add them together.
3. 3Count the incidents the engineer responded to outside of normal business hours and apply the callout fee to each.
4. 4If your policy includes a minimum-hours rule, make sure short callouts are billed at the minimum — not the actual duration.
5. 5If your policy includes an hourly rate for active work, sum the incident durations and multiply by the rate, excluding any time inside business hours.
6. 6Add all three components together to get the gross on call pay for the period.

Where teams go wrong

• Applying the wrong public holiday calendar for the engineer's region
• Forgetting the minimum-hours rule — paying callout fees without applying the floor
• Missing time zone differences — what counts as a weekday depends on local time, not UTC
• Missing partial days — engineers who go on call partway through a day may be owed a partial rate
• Calculating once manually and copy-pasting the formula — small errors compound quickly across a team

Stop calculating it manually

Done correctly, on call pay calculation means cross-referencing schedule data with incident data, applying public holiday rules for each engineer's region, and formatting everything into a file payroll can actually use. For a single engineer it's tedious. For a team it's a significant recurring time sink — and a source of errors that land back on your desk as payroll disputes.

CalloutPay handles all of this. Connect your PagerDuty account, enter your rates once, and get a finance-ready spreadsheet with every line itemised — so payroll can verify the figures and your engineers can see exactly how their pay was calculated.