Setting Up Overtime Calculation

You can choose among several methods for calculating overtime pay for employees. For example, you can set up your records so that payroll calculates overtime based on the Regular Rate FLSA (Fair Labor Standards Act) for some or all of your employees.

Regular Rate FLSA rate generally refers to a rate that is the total pay for employment (including other compensation such as bonuses, shift differential, and so on), divided by the number of hours worked.

Sage HRMS Payroll automatically calculates overtime for the current period based on the overtime calculation method, overtime schedule and regular hours, specified on the Employee Payroll window. You can override the automatic overtime calculation for an employee when you enter a timecard.

To Set Up for Overtime Calculation

1. Create at least one overtime schedule.
2. You may want to set up certain earnings to be included in an overtime calculation that is based on the Regular RateFLSA. For each such earning, on the Earning/Deduction Codes window (in Payroll Setup), select the earning which must be one of these types:
• A Salary & Wages type that uses an employee calculation method of flat, fixed or hourly rate.
• Reported tips.
• Allocated tips.
3. Select Include in Regular Rate CalculationInclude in FLSA Overtime Calculation

   This field displays only for the following types of earnings:

   • Salary & Wages that uses an employee calculation method of Flat, Fixed, or Hourly Rate.
   • Reported Tips.
   • Allocated Tips.

   Select this check box if you want to include this earning in the regular pay rate that is used for overtime calculations. to calculate FLSA overtime. After you save this setting, this will be the earning's default setting when you subsequently assign the earning to employees.

   Note: Changing this field does not update the setting for existing employees with the earning assigned.

   You can change the setting for employees who are assigned the earning using the Pay tab table of the Employee Payroll window or the Update Earnings/Deductions window in Payroll > Tasks.

4. Click Save.

5. Open the Employee Payroll window. On the Pay tab, for each employee:

   1. In the Overtime Calculation field, select one of the Overtime Calculation methods (the default is Hourly Rate). If you want to calculate overtime based on the Regular Rate, FLSA, be sure to choose one of the Regular Rate FLSA methods.
   2. In the Earnings/Deductions table, for each earning that has been set up as described in step 2 you can change the Include in FLSA Overtime CalculationInclude in Regular Rate Calculation field.

      Tip: If you want to update the Include in FLSA Overtime CalculationInclude in Regular Rate Calculation field for a set of employees, you can use the Update Earnings/Deductions window.

   3. Check that the employee's regular hours (per period, day, or week) are appropriate.

   4. On the Class/Schd tab of the Employee Payroll window, assign an overtime schedule to the employee.

To calculate overtime pay, enter a timecard

• If an employee worked overtime, enter the overtime information on a non-reusable timecard to have payroll automatically calculate overtime pay.
• See Entering Overtime on a Timecard for more details about entering and processing overtime.
• You can also override this overtime setup.
• You should verify that the number of days worked on the timecard reflects your intentions.