Overtime

Overtime: How is it calculated?

What is an OT Premium?

The amount of the overtime premium is calculated as 1/2 the Average Wages (before OT) x (hours overtime). This calculation will be the same for either overtime option, standard or daily overtime.

For example:  if a person's average wage for the pay period is $10 per hour and works 42 hours in a week, then their base pay will be $420 (calculated as 42 hours multiplied by $10/hour) and the overtime premium will be 10 (calculated as 2 hours multiplied by $5/hour).

Standard Overtime or Daily Overtime

Standard Overtime:

Standard Overtime is active in your instance. You can skip to the next section about where to set your hours to make any changes if needed.

Daily Overtime:

Some companies may need to provide Daily Overtime rather than for an entire pay period due to state requirements. To enable Daily Overtime, just go to the Company tab > General > Features > Payroll: Daily Overtime Pay and toggle this feature ON (see below)

You can click Settings to set a start date to have daily overtime begin taking effect. Overtime will only impact payroll data from the start date forward. The start date defaults to the day after your last payroll period was closed.

Where can I set my hours?

You can set the maximum hours for the pay period or the day to make sure overtime is calculated based on set hours. Just go to the Company tab > General > Payroll Options to find the maximum hours settings.

The Full Time Hours is for overtime for the entire pay period. The Daily Overtime Hours is for the daily overtime (see below).