Guide to define overtime pay based on hours worked.
Zenoti's advanced overtime multiplier allows you to set up overtime pay rates for the following five types of overtime durations. You can set up pay rates for either one, multiple, or all five overtime scenarios.
Overtime type | Length of overtime | Description |
|---|---|---|
Daily | More than 8 hours | The employee worked more than 8 hours on a regular workday. |
Daily | More than 12 hours | The employee worked more than 12 hours on a regular workday. NoteIf you do not define the pay rate for a certain overtime, it is considered regular pay. For example, the pay rate for More than 8 hours overtime is not defined and the pay rate for More than 12 hours overtime is defined. If an employee clocks 10 hours on a particular workday, the extra 2 hours are also considered regular pay as there is no pay rate defined for More than 8 hours overtime. |
Weekly | More than 40 hours | The employee worked more than 40 hours during the workweek. |
Seventh day | Less than 8 hours | The employee worked for the first 8 working hours on the seventh consecutive workday. |
Seventh day | More than 40 hours | The employee worked for more than 8 hours on the seventh consecutive workday. |
To avoid overlapping work weeks and pay periods, it is recommended that you set up the starting day of the work week for your center and the pay period’s start day to the same day and define pay periods in multiples of seven days. You can set up separate multipliers for each overtime at the center level and override the rates for certain employees. See examples.
Important
This feature is not available by default. Write to prod_pm@zenoti.com to enable this.
Only hourly rates are considered when calculating average hourly pay for the week and additional bonuses, commissions, and so on are not factored for overtime pay calculations.
When the center level setting Employee pay using hourly pay and service commission comparison is set to Based on higher of total hourly pay (including overtime hours) and service commission, Zenoti compares hourly pay and commission on a weekly basis.
Formula to calculate Average Hourly Rate (AHR) = [(Work Task A hours x Work Task A rate) + (Work Task B hours x Work Task B rate)] / (Work Task A hours + Work Task B hours)]
Center level settings for advanced overtime multiplier
Required roles: Any role with access to the Administrator mode
Required permissions: None
At the center level, click the Configurations icon.
Search for and select the Advanced overtime setting in the Employee section.
Enable this setting.
To define the overtime pay rate for each type, select the corresponding setting and enter the multiplier value. For example, to define the overtime pay rate for more than twelve hours on a workday as double pay, select the More than 12 hours will have _times payout setting and enter 2 in the box.
Click Save.
Note
Based on the overtime types you set up, the respective durations are displayed in the Employee Payroll Summary v2 Report.
Override center level advanced overtime multiplier settings for an employee
At the center level, click the Employee icon and go to Employees > Manage Employees.
Search for an employee record using their first name, last name, phone number, email, employee code, tag, username, or nickname.
Click the name of the employee.
On the General tab, in the Compensation Info section, switch on the Override center advanced overtime configuration setting.
Make necessary changes.
Click Save.
Examples
Example 1
Assume 2 work tasks. Work Task 1 - $15 per hour and duration is 30 hours. Work Task 2 - $10 per hour and duration is 34 hours.
AHR= [(30*15)+(34*10)]/(30+34) = 12.3
Payroll starts on Jan 01 and ends on Jan 07. The center's working week starts on Sunday and ends on Saturday.
Date | Jan-01 | Jan-02 | Jan-03 | Jan-04 | Jan-05 | Jan-06 | Jan-07 | Total hours for the week | Multiplier | AHR | Total pay for the week |
|---|---|---|---|---|---|---|---|---|---|---|---|
Day | Sun | Mon | Tue | Wed | Thu | Fri | Sat | Sun | |||
Duration in hours for the day | 8 | 9 | 11 | 9 | 6 | 12 | 9 | 64 | N/A | ||
Duration of regular hours | 8 | 8 | 8 | 8 | 6 | 2 | 40 | 1 | 12.3 | 492 | |
Duration of more than 8 hours | 1 | 3 | 1 | 5 | 1.5 | 12.3 | 92.25 | ||||
Duration of more than 12 hours | 2 | 12.3 | 0 | ||||||||
Duration of more than 40 hours for the week | 10 | 8 | 10 | 1.5 | 12.3 | 184.5 | |||||
Duration of less than 8 hours on the seventh consecutive day | 8 | 1.5 | 12.3 | 147.6 | |||||||
Duration of more than 8 hours on the seventh consecutive day | 1 | 1 | 2 | 12.3 | 24.6 | ||||||
940.95 |
On Jan-06, the employee worked for 12 hours. Since it is beyond 40 hours for the work, the following are applicable for pay calculations
Regular work hours: The first 2 hours are considered regular worktime and compensated at the regular pay rate.
Overtime: The remaining 10 hours are classified as overtime. You can choose to apply:
Overtime pay rate exceeding 40 hours per week: This is the most common approach and is likely to result in higher pay for the employee.
Overtime pay rate exceeding 8 hours per day: While this option exists, it typically leads to lower total pay compared to the weekly overtime rate.
Therefore, to ensure the employee receives the most favorable compensation, applying the overtime pay rate exceeding 40 hours per week is recommended.
Example 2
Pay period starts on Jan 01 and ends on Jan 14. Center's working week starts on Sunday and ends on Saturday.
Date | Jan-01 | Jan-02 | Jan-03 | Jan-04 | Jan-05 | Jan-06 | Jan-07 | Jan-08 | Total hours for week 1 | Jan-09 | Jan-10 | Jan-11 | Jan-12 | Jan-13 | Jan-14 | Total hours for week 2 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Day | Sun | Mon | Tue | Wed | Thu | Fri | Sat | Sun | Mon | Tue | Wed | Thu | Fri | Sat | ||
Duration in hours for the day | 8 | 9 | 11 | 9 | 6 | 12 | 9 | 9 | 64 | 8 | 10 | 12 | 9 | 7 | 6 | 61 |
Duration of regular hours | 8 | 8 | 8 | 8 | 6 | 2 | 8 | 8 | 40 | 8 | 8 | 8 | 8 | 0 | 40 | |
Duration of more than 8 hours | 1 | 3 | 1 | 1 | 5 | 2 | 4 | 7 | ||||||||
Duration of more than 12 hours | ||||||||||||||||
Duration of more than 40 hours for the week | 10 | 8 | 10 | 1 | 7 | 6 | 14 | |||||||||
Duration of less than 8 hours on the seventh consecutive day | 8 | |||||||||||||||
Duration of more than 8 hours on the seventh consecutive day | 1 | 1 |
Breakdown of hourly pay for week 1 (Jan 01 to Jan 07)
Work Task - $15 per hour and duration is 30 hours. Work Task 2 - $10 per hour and duration is 34 hours.
AHR= [(30*15)+(34*10)]/(30+34) = 12.3
Total hours for the week | Multiplier | AHR | Total pay for the week | ||
|---|---|---|---|---|---|
Duration in hours | 64 | N/A | |||
regular (1x) | 40 | 1 | 12.3 | 492 | |
more than 8 (1.5x) | 5 | 1.5 | 12.3 | 92.25 | |
more than 12 (2x) | 2 | 12.3 | 0 | ||
weekly more than 40 (1.5x) | 10 | 1.5 | 12.3 | 184.5 | |
seventh day less than 8 (1.5x) | 8 | 1.5 | 12.3 | 147.6 | |
seventh day more than 8 (2x) | 1 | 2 | 12.3 | 24.6 | |
940.95 |
Breakdown of hourly pay for week 2 (Jan 07 to Jan 14)
Work Task 1 - $14 per hour and duration is 30 hours. Work Task 2 - $12 per hour and duration is 31 hours.
AHR= [(30*14)+(31*12)]/(30+31) = 12.98
Total hours for the week | Multiplier | AHR | Total pay for the week | |
|---|---|---|---|---|
Duration in hours | 61 | N/A | ||
regular (1x) | 40 | 1 | 12.98 | 519.2 |
more than 8 (1.5x) | 7 | 1.5 | 12.98 | 136.29 |
more than 12 (2x) | 2 | 12.98 | 0 | |
weekly more than 40 (1.5x) | 14 | 1.5 | 12.98 | 272.58 |
seventh day less than 8 (1.5x) | 1.5 | 12.98 | 0 | |
seventh day more than 8 (2x) | 12.98 | 12.98 | 0 | |
928.07 |