Shift and Overtime Rates
- 2 Minutes to read
Shift and Overtime Rates
- 2 Minutes to read
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The hourly wages paid to employees vary for different shifts. In usual practice, an employee is paid as per the base wage rate for the regular shift. The hourly rates for odd shifts like the evening or night shifts are calculated by multiplying the base wage rate by the shift differential multiplication factor set for that shift. Similarly, the overtime rates are calculated by multiplying the shift rate by the multiplication factor set for overtime.
The 'Shift' tab in the 'Set up' interface allows the payroll admins to enable or disable different shifts, overtime extended from those shifts, set shift differential multiplication factors for the shifts and the overtime, and more. The overtime rates can be set for up to two levels for each shift.
To configure the shift settings
- Click 'Setup' on the left.
- Ensure that you are on the 'Shift' tab.
- Click the
button to edit the settings.- Weekdays - Select the working days allowed for your company's projects. Only the working days enabled in this interface are available to the project managers to select the working week for their projects.
- Shift - Use the toggle switches to enable required shifts for your company's projects. Only the shifts enabled in this interface are available to the project managers to select working shifts for their projects.
- Shift rate - Specify the shift differential multiplication factor for each enabled shift. The hourly rate for each employee working in that shift is computed by multiplying their base wage rate by this value.
- Shift Hours - Specify how many hours are allowed for each shift (usually 8 hours)
- Overtime 1 and Overtime 2- You can configure overtime rates at successive levels and set their limits. Overtime 1 rate is effective on the number of hours extended from the shift until its limit. If the overtime continues beyond the limit of overtime level 1, the overtime rate for level 2 is applied for hours worked beyond overtime level 1.
- Use the toggle switch to enable or disable the overtime for each enabled shift.
- Rate - Specify the overtime rate multiplication factor for each enabled OT level. The hourly rate for each employee working in that OT limit is computed by multiplying their base wage rate by the shift differential rate of the respective shift AND the OT rate. See the illustration below for more details.
- Hours - Set the maximum number of hours under the OT level for each shift.
button to edit the settings.- Click the
button at the top right for your settings to take effect.
button at the top right for your settings to take effect.Illustration:
For example, let us consider the shift differential multiplication factors are set as given below:
Shift | Shift Differential | Overtime 1 | Overtime 2 | |||
Rate | Hours | Rate | Hours | Rate | Hours | |
Regular | X 1 | 8 | X 1.5 | 2 | X 1.75 | 2 |
Shift 1 | X 1.25 | 8 | X 1.5 | 2 | X 1.75 | 2 |
Shift 2 | X 1.5 | 8 | X 1.72 | 2 | X 2 | 2 |
The following table shows the wages calculated at different scenarios:
Worker | Shift | Base wage rate (CTC)($) | Hours worked | Wages calculated for each wage type($) | |
Jack | R | 20 | 8 | Shift | 20 x 1 x 8 = 160 |
Tom | R | 20 | 10 (8 + 2) | Shift | 20 x 1 x 8 = 160 |
OT | 20 x 1 x 1.5 x 2 = 60 | ||||
Dick | R ; | 22 | 11 (8 + 2 + 1) | Shift | 22 x 1 x 8 = 176 |
OT 1 | 22 x 1 x 1.5 x 2 = 66 | ||||
OT 2 | 22 x 1 x1.75 x 1 = 38.5 | ||||
Harry | S1 | 21 | 8 | Shift | 21 x 1.25 x 8 = 210 |
Joe | S1 | 24 | 10 (8 + 2) | Shift | 24 x 1.25 x 8 = 240 |
OT 1 | 24 x 1.25 x 1.5 x 2 = 90 | ||||
Sam | S1 | 26 | 11 (8 + 2 + 1) | Shift | 26 x 1.25 x 8 = 260 |
OT 1 | 26 x 1.25 x 1.5 x 2 = 97.5 | ||||
OT 2 | 26 x 1.25 x 1.75 x 1 = 56.88 | ||||
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