Overtime not calculating correctly (Semi-Monthly)

Created - 03/20/13



We cannot make sense of the way OT is calculating. For example, on the 03/08/13 payroll, Employee A worked a total of 94.35 hours. The system calculated him for 89.18 regular hours and only 5.17 hours of OT. The pay period days fall on a Monday - Friday, so why isn't it calculating 80 regular and 14.35 OT?

Thank you,

Answer 1:

The easiest answer for you on this situation is, it's a semi-monthly payroll that will almost always split your work week.
Our System is calculating the hours correctly, but it will wait for the work week to end before calculating the OT.
So for example, if you start a new payroll for the next pay period, this employee will start with 9.62 hours of overtime.



Question 2:

I am having trouble understanding what you mean. The clients pay period  runs from the 8th through the 24th -

So why would overtime hours earned in this pay period no be calculated on this pay period?


Answer 2:

The client is semi-monthly. The basic premise of semi-monthly is that it is based on dates, rather than work week, like bi-weekly pay. In the case of Semi-monthly, the pay period will consistently cut off a work week, so the OT calculation cannot complete until the WW has completed. If the WW has been cut by the pay period, then the OT hours will be fully determined when the WW completes, even if it crosses into a new pay period.

If you or the client are not able to see the calculation, you can map out the WW and payroll dates on a calendar with the time entries mapped and you will see that it adds up, noting that the WW begins on Sunday.



Question 3:

I am still not sure I agree with what you are saying - overtime is still anything over 40 hours in a work week correct?

Nevertheless I am seeing other issues with overtime calculations as well

Answer 3:

Yes, and that rule is still being applied. But, the total OT to be paid is paid out when the work week finishes. In this case, the pay period is cutting off a day of the work week. Therefore, HourDoc is holding the TOTAL OT to be paid until the work week finishes, in this case, it is pushing the 9.x hours into the next pay period. You can easily see this by logging into their account and looking at the payroll for this pay period.

Question 4:

I still don't see it  - but i need to be able to explain clearly to my client - are we in agreement that the pay period is 02/24 through 03/08? or am i off on that?


Answer 4:

Please look at all of this data:

1. Account is set to semi-monthly with the semi-monthly beginning on the 25th. That means that from the 25th, you count 15 days and that is the end of the pay period - and that is solely dependent on how many days are in the month.

2. From the end of the last pay period, from which ever day you end on, you go from that day until the 24th of the month, which is one day before the payroll begins for the 25th.

The reason I bring up these two points is that is an arbitrary number in some sense of how you get your calculations, and it is precisely the problem with semi-monthly and trying to get people to understand.

Now, please look at the time entries for this employee: Employee A

CLOCKED IN               CLOCKED OUT                           BREAKS                                   WORKED
03/12/13 - 07:03 am    (Tue) 03/12/13 - 04:10 pm        (Tue) 2:03 - 02:33 pm                         8.62
03/13/13 - 07:04 am    (Wed) 03/13/13 - 03:44 pm       (Wed) 2:04 - 02:34 pm                       8.17
03/14/13 - 07:03 am    (Thu) 03/14/13 - 05:40 pm        (Thu) 2:03 - 02:33 pm                         10.12
03/15/13 - 07:02 am    (Fri) 03/15/13 - 05:22 pm          (Fri) 2:02 - 02:32 pm                           9.83
03/16/13 - 12:05 pm    (Sat) 03/16/13 - 03:23 pm           --                                                        3.3
03/18/13 - 06:59 am    (Mon) 03/18/13 - 05:28 pm       (Mon) 1:59 - 02:29 pm                         9.98
03/11/13 - 07:00 am    (Mon) 03/11/13 - 05:07 pm       (Mon) 2:00 - 02:30 pm                         9.62

The 11th, Monday is part of the pay period from 2/25 - 3/11. But I see on the payroll, the client terminated the payroll date on 3/8 - which technically is incorrect, because Semi-monthly is 15 days for the first payroll data set and they cannot just cut the payroll off whenever. In this case, the 11th, which is supposed to be part of that payroll is adding into the hours of the next payroll, next work week.

Take, 3/11 - 3/16, this value = 49.66, which means that the employee earned 40 hours REG and 9.66 OT.

I highly recommend that you take a blank calendar and plug in all of the values for each day worked. Once you do that you will see that all of the data lines up correctly and the amounts where they are being applied is correct based on the principles of semi-monthly pay. You do need to address why they cut off the payroll early.

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