Some commissioned employees such as salon managers may or may not be exempt from overtime.

  • For employees with hourly pay + commission exceeding (typically) 1.5 times hourly pay, OT is exempt.

Else, OT is paid at the rate of hourly pay + commission amount.

  • Exempt employees are paid the sum of hourly pay and commission but hourly pay should be for no more than 40 hrs. For example, if the employee worked for 50 hours, they would still get hourly pay for 40 hours.
  • Non-exempt employees are paid using the following formula.

If

Commission + (Total Hours*Hourly Rate) > (Total Hours*Horly Rate * 1.5)

Then

Total pay = Commission + (Total Hours*Hourly Rate)

Else

(Total hours*Hourly rate)+Commission+(Total hours*Hourly rate+Commission/Total Hours)*0.5*OT hours

Consider this example.

A center manager with an hourly rate of $10, with 25% commission, worked for 45 hours in a week and earned $800 in service sales.

To calculate her payout:

Step 1: Eligible for OT ? - Yes

Step 2: Is [Hourly pay + Commission ($650.00) > Total hours * Base rate * 1.5 ($675)? ] - No

Step 3: Pay = X + (overtime hours * (X/total hours) * 0.5)

Pay = 650 + (5 * (650/45) * 0.5) = $686.10

Consider the following flowchart to understand how overtime pay for non-exempt employees is calculated; this is typically for salon managers.

To define whether a commissioned employee is exempt or not exempt from overtime, use the employee profile page.

To override payout for an employee:

  1. Ensure you are at the center level.
  2. Open an employee profile (Employee > Employees > Employees > Name of the employee > General tab).
  3. In the Job info section, for the setting Employee pay using hourly pay and service commission comparison, select Override at employee level.
    Note: You can see this option only when center-level configuration is set to Based on employee overtime exemption.
  4. Select either one of the following options:
  5. Click Save.
    This particular employee is paid based on the settings you chose in her profile.

Conditions Apply

For OT exempt employees:

  • You can configure Overtime using the Weekly option (you cannot use the Multiplier option).
  • Pay-out type must be set to Hourly pay + Service commission (OT not eligible) in Hourly pay/Service commission report.

For OT eligible employees

  • You can configure Overtime using the Weekly option (you cannot use the Multiplier option).
  • Pay-out type must be set to either Hourly pay + Service commission (with Overtime) or Hourly pay + Service commission (No Overtime) in Hourly pay/Service commission report.

See Also

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