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Understanding Weekly Overtime with Semi-monthly Pay Periods


TimeClick® offers a smart overtime function for semi-monthly pay periods. If you’re calculating overtime on a weekly basis with a semi-monthly pay period for your employee time cards, you’ll want to read this to avoid confusion.

Overtime calculations can get confusing when you have a semi-monthly pay schedule. In the preferences menu you can set which day of the week your pay period begins. Semi-monthly pay periods begin on a different day each month, so this setting actually tells TimeClick® how to start calculating weekly overtime, but ignores it for the other purposes. For example, if you set the pay period to begin on Sunday, then the program will add up all the hours for an employee between Sunday and the following Saturday. If is the total is greater than the threshold amount (normally 40 hours) the employee will receive overtime. By calculating overtime on a weekly basis, you need a full week’s worth of time to calculate properly. Here is an example of a semi-monthly period where the week begins on a Sunday.

 

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This occurs because in order to calculate the overtime from Sunday to Saturday, the week must be completed. The 1st through the 15th contains part of the week of the 12th-18th. Since this is not a full week, TimeClick® cannot complete the overtime calculation–it doesn’t know how many hours the employee will work on Thursday, Friday and Saturday. This week’s overtime will be calculated on next pay period’s report.

The same situation occurred on last pay period’s report so the overtime for the 28th-4th was carried forward to the 1st-15th.  This does not mean that an employee’s total hours will include the 28th – 30th of September. Instead, TimeClick totals all the hours an employee worked from the 1st-15th. TimeClick® then calculates how many overtime hours the employee had the week of the 28th-4th and the 5th-11th. That total is the number of overtime hours on the report. In order to calculate the regular hours, TimeClick® takes the totals hours, subtracts the overtime hours and the remaining total is the regular hours.

Determining the overtime for semi-monthly pay periods can be confusing and difficult.  If you are still unclear about how to properly calculate overtime please contact us!

 

Braiden J.

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