Glossary
What is overtime pay?
What overtime pay is, how the ordinary hourly rate is worked out from monthly pay, and how overtime is added to the payslip.
Updated
In short
Overtime pay is extra wages for hours worked beyond normal hours, often at one and a half or twice the ordinary rate. SimpleERP records check-in and check-out times but does not compute overtime; you add it as a payslip line.
Overtime pay is the extra wage an employer pays for hours worked beyond the normal working day or week. Many countries set a minimum premium for covered workers, often one and a half times the ordinary rate, and limits on overtime hours; contracts may pay more. The ordinary hourly rate is usually monthly pay divided by working days and daily hours.
Overtime pay: a worked example
Ana M, welder at Harbour Steel Furniture, a fictional business paying in US dollars, works 12 hours of overtime in October 2026 to finish an order of steel racks. Her salary is $1,760 for 22 days of 8 hours, and the business pays overtime at one and a half times the ordinary rate.
| Step | Working | Amount |
|---|---|---|
| Ordinary hourly rate | $1,760 ÷ 22 ÷ 8 | $10 |
| Overtime rate, one and a half times | $10 × 1.5 | $15 |
| Overtime for 12 hours | $15 × 12 | $180 |
FAQ
Questions, answered
Is overtime always paid at a higher rate?
Not everywhere. Many countries require a premium for covered workers, commonly one and a half or twice the ordinary rate; others leave it to the contract, or exclude managers. Your contracts can pay more, but not less than the law requires.
What counts as overtime hours?
Generally hours beyond the normal day or week set by law or the contract, such as more than 8 hours a day or 40 to 48 hours a week. Some countries also cap total overtime. Check the rules for your country and type of work.
Does SimpleERP calculate overtime from check-in times?
SimpleERP does not calculate overtime pay from check-in times. Check-in and check-out give worked hours per day, shown in the attendance summary as average hours, but overtime pay is not computed. Total the extra hours, work out the amount and add it as an Other earning line on the payslip.
Do deductions apply to overtime pay?
Usually income tax and social security apply, because overtime is pay. Whether it counts for pension depends on the scheme. In SimpleERP, an Other earning line adds to gross, so deductions set as a percentage of gross include it.
Related
Keep reading
Attendance register
The daily record of each employee's presence, absence and leave, totalled monthly into paid days.
Read moreGross vs net salary
Gross is total earnings before deductions; net is what reaches the employee's bank after them.
Read moreHR, attendance & leave
Employees, a daily attendance sheet, phone check-in, holidays and leave balances.
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