Overtime Rules

Overtime rules automatically calculate overtime hours and overtime salary based on pre-defined set of instructions

What are Overtime Rules?

Overtime Rules are pre-defined set of instructions to calculate overtime minutes/hours and overtime salary for employees.

Overtime Rules are linked to Work Shifts. For each Work Shift, you can have multiple rules to calculate overtime. The work shift for an employee is determined by Shift Policy assigned to that employee.

How to Define an Overtime Rule?

To configure Overtime Rules, go to Setup > Overtime Rules

Here are the step by step instructions to define an Overtime Rule.

Select a Shift

Select a Shift from the dropdown to start defining overtime rules for that shift.

Overtime Rules - Select Shift

Select Payable Components

Select Salary Components that should be considered to calculate Overtime Rate. The components that appear in this list are: Payable Days, Payable Hours and Fixed components only.

Rate Calculation: Overtime is calculated at hourly rate of salary. To determine hourly rate, the selected components are divided by number of days in the period and then further divided by number of Payable Hours in the applicable shift for a particular date.

Overtime Rules - Salary Components

Select Salary Range (Optional)

Select a salary range to restrict minimum or maximum amount of salary per month. For e.g. if you specify a minimum salary of 25,000 and employee salary for the month (based on selected components) is 20,000, the overtime calculation will consider 25,000 instead of 20,000 to calculate overtime rate. Similarly maximum amount will restrict the maximum salary if the employee salary is above this range.

Overtime Rules - Salary Range

Salary Range is optional. You can keep '0' in both minimum and maximum to disable this restriction.

Create an Overtime Rule

Click on + sign to create an Overtime Rule. A dialog will open to create the rule.

Overtime Rule - New Rule Dialog

Here is the explanation of different selections in the Overtime Rule dialog:

1. Attendance Type: Select the type of attendance for which Overtime should be calculated. Generally, overtime rules are created when employee is working late on a normal working day or employee is working on a Weekly Off or a Holiday. For late working, let's select Present in the above dialog.

2. Time Basis: There are 4 types of selections here:

   • Early Coming: When the employee is working even before the shift starts.

   • Late Going: When employee is working after the shift is over.

   • Net Late: When employee came late in the morning but also worked late in the evening and overall the employee has worked more than stipulated shift hours.

   • Total In-Minutes: This setting is useful in cases where employee is working on a Holiday or Weekly Off, where you want to give Overtime for entire working hours for that day.

3. Time Range (mins): Enter a range in minutes for which Overtime should be calculated. For e.g. if you have specified 30 minutes to 60 minutes, overtime will be calculated only if employee has worked for at-least 30 minutes and at-most 60 minutes. In case you do not want to restrict upper limit, simply enter a higher number like 9999.

4. Overtime Mins: There are 3 settings here:

   • Actual: Overtime is given for actual eligible minutes (as per Time Basis and Time Range)

   • Above: Overtime is given for minutes above the minutes specified here.

   • Fixed: Overtime is given for minutes specified here.

Click Save Rule to save the rule.

You can add more rules for a given shift.

Please note that there can be only one rule for a set of attendance type and Time Basis. For e.g., there an be one rule for Present - Late Going, another rule for Present - Early Coming etc. But there cannot be two rules for Present - Late Going.

Conclusion

Overtime Rules work in conjunction with Shift Policy and Week Off Policy. Checkout the respective articles to know more about these policies.