Overtime Schemes

Overtime Schemes

Menu Path : Setup > Payroll Setup > Overtime Schemes
Accessible to : Application Administrator

If payment of overtime has to be automated then this feature can be used. Overtime schemes are used to define the amount of extra payment which is to be done to employees on working overtime. To enable this feature please get in touch with your Account Manager.


A. Basis of Overtime amount calculation

Overtime is calculated based on the hours reported in time sheet and these are multiplied by the hourly wage. To arrive at the hourly wage the monthly wage is divided by the standard hours for the month. Standard hours for the month can be calculated in two ways
1.  Fixed for all - If this option is selected then a value is taken which is then applied to all employees irrespective of the shift to which they are mapped
2. As per shift hours - If this option is selected then the standard shift hours are calculated based on the shift which is mapped to the employee. You can use the "Excluding standard breaks" to exclude standard breaks from the shift hours.
Idea
In this example we will see how overtime is calculated when Standard hours are based on shift hours excluding standard breaks.
Shift time = 9 am to 6 pm
Lunch = 12:30 pm to 1:15 pm

If excluding standard breaks is selected then 
Shift hours = 8:15 per day

Suppose Basic, HRA and Special Pay are selected for Overtime in Deduction and Encashment table and,
Basic = 34000
HRA = 14000
Special Pay = 18000

For the month of September, which has 30 days.
Daily wage = 66000/30 = 2200 (calculation of daily wage is always done on the basis of standard number of days in a month, weekly offs, holidays in a month are not considered).
Hourly wage = 2200/8.25 = INR 267 per hour

If Overtime = 4 hours and multiplier = 2 then
Overtime to be paid = 267 x 4 x 2 = INR 2136

B. Managing Overtime Schemes


Overtime schemes are used to have different payment rates for different projects and also for different types of days on which overtime is done.
1. Click on "Add New Scheme"
2. Enter scheme name and enter rate for OT Multiplier 
3. Map with Project code : When this feature is activated a system defined charge code is visible on Setup > EazeHR > Project Setup > Charge Codes tab, the charge code is "Overtime" and Description is "Working late beyond office hours". You will need to add this charge code to all the projects where overtime booking is to be allowed
4. Click on "Submit" to save scheme

Overtime multiplier is used to calculate the amount which is to be paid to the employee and is dependent on the type of overtime.

Refer the following articles for more details
- Overtime Payment : to understand the overall feature
- Deduction and Encashment : to understand which heads will be paid when overtime is paid


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