Weighted average overtime
If employees work multiple jobs or positions with different pay rates within the same workweek, you can enable this setting to calculate overtime using a blended (weighted average) regular rate. Instead of applying overtime based on a single pay rate, the system calculates a weighted average rate for the week and uses it to determine overtime pay accurately.
Before you start
To setup the weighted average overtime calculation for payroll, you’ll need the Administrator access level or the Manage payroll settings permission enabled.
To setup weighted average overtime:
- Navigate to the Settings menu in the top-right corner.
- Select Pay Rules under the Time & Attendance section.
- Select the pay rule you wanted to configure.
- Use the toggle button beside the Use weighted average (Blended) overtime calculation option to enable/disable this setting.
- Click the Save button at the bottom.
Weighted average overtime scenario:
Let's say an employee is working for position A and position B for the same workweek with the below mentioned duration and wages. The overtime rate is configured as 1.5 times regular rate. Here is how the pay for the workweek is calculated with weighted average overtime.
Position A hourly wage = $10/hour
Position B hourly wage = $20/hour
Position A worked hours = 28 hours
Position B worked hours = 22 hours
Worked Hours
| Regular Earnings
| Blended regular rate
| Overtime premium
| Total Pay
|
Position A - 28 hrs
| $10 * 28 = $280
| Total worked hours = 50 hrs
Total regular earnings = $720
Weighted Average rate = 720 / 50 = $14.4
| Overtime hours = 10hrs
Overtime premium = 10 x 0.5 x 14.4 = $7.2
| Total Pay = $720 + $7.2 = $727.2
|
Position B - 22 hours
| $20 * 22 = $440
|