How to Calculate OT Allowance Through the System？
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Written by Workstem CS
Updated over a week ago

Normally, you will encounter two situations where you need to pay OT allowances to employees for overtime work .

  • Some company's OT allowances are calculated based on different overtime hours: weekdays OT allowance = average hourly salary * actual normal OT duration * 1.5; rest days OT allowance = average hourly salary * actual OT hours of rest days * 2.

  • Some company's OT allowances are calculated based on personnel, and every employee has his or her own OT rate.

Both of these two scenes can be achieved through Workstem system.

To calculate OT allowance through the system, you need to complete the following steps:

  1. Count employee OT hours

  2. Set OT rate

  3. Set OT allowance calculation formula

  4. Perform payrun calculations

step 1

Workstem counts OT hours through the timesheet. The employee submits the application for the timesheet on the Mobile app.

Select [Type] to [Overtime] , and [Overtime Category] to [Working Overtime on Weekdays], [Working Overtime on Rest Days] or [Working Overtime on Statutory Holidays], after approval by the supervisor, the corresponding OT duration can be generated.

Tip 🌟

If your company has different rates for counting weekdays OT allowances and overnight OT allowances, the employee needs to submit the timesheet separately.

For example, if the employee works overtime from 20:00 to 2:00, and the OT rate for 20:00-24:00 is 1.5; 00:00-02:00 is 2, he or she needs to submit two different timesheets and the [Overtime Category] for 20:00-24:00 should be [Weekdays overtime], 00:00-02:00 should be [Rest days overtime]. Then the system will count OT hours separately.

Step 2

If your company's OT rate is fixed: overtime on weekdays is 1.5; overtime on rest days is 2, you can skip this step and just define it in the formula.

But if each employee has his own OT rate, you need to add [OT rate] in the [Pay Items] first (pay type is others) and edit the employee's [OT rate] in the Fixed Pay Items.

Step 3

Find [OT Rate] in [Pay Item] of salary settings, double-click to open, and set the OT allowance calculation formula in step 3

Fixed OT rate:

OTAllowance = SumAttendData('workingOvertimeOnWeekdays')*Hourly salary* 1.5 + SumAttendData('workingOvertimeOnRestDays')*Hourly salary*2 + SumAttendData('workingOvertimeOnStatutoryHolidays')*Hourly salary *3

If the OT rate is not fixed:

OTAllowance = ( SumAttendData('workingOvertimeOnWeekdays') + SumAttendData('workingOvertimeOnStatutoryHolidays') + SumAttendData('workingOvertimeOnRestDays')) *Hourly wages*OTrate

Step 4

After confirming that the correct OT duration has been counted and the calculation formula is set, the pay run calculation can be carried out to automatically calculate the employee's OT allowance.

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