Overtime Policy is used to add overtime policy settings when a company has more than one overtime policy. Previously, you can also learn how to set the maximum overtime limit policy here.

The following are the steps to manage Overtime policy settings:

1. Go to the “Settings” menu.
   

2. In the Time menu, click Overtime.
   

3. Click the “Overtime Policy” tab.
   

A. Creating an Overtime Policy

1. Click “Create policy” to add an overtime policy.
   

2. Enter the overtime policy name in the “Overtime policy name” field.
    

3. Select the overtime compensation type in the “Compensation type” field to determine the form of compensation employees receive. Select Combined compensation if the company provides dual compensation in the form of overtime pay and additional overtime leave balance at the same time. If you only want to provide financial compensation included in payroll, you can select Paid overtime. Meanwhile, select Overtime leave if the compensation is fully converted into employee leave entitlement in place of overtime pay. 
   

4. Check “No rounding” if there is no minute rounding in the overtime policy.
   

5. If you select the overtime rounding option, enter the details in the available fields. To remove a rounding duration that has been created, click the “-” icon.
   
   

   The example above means that an overtime duration of 20–39 minutes will be rounded by the system to 30 minutes. Then, an overtime duration of 40–59 minutes will be rounded to 60 minutes.

6. After that, you can select the rate option more specifically, as follows:
   - Fixed amount: Select this option if the hourly or daily rate is fixed. You can enter the amount in the “Amount” field.
   
   - Default formula: Select this option if the rate is calculated based on the system's standard formula, namely total base salary (plus certain allowances) divided by a specific coefficient. You can specify the coefficient value in the “Coefficient” field, and add the relevant allowances through the “Allowance” field. To remove an allowance you have selected, click the “-” icon.
   
   - Custom formula: Select this option if the rate calculation uses a custom formula based on the previous formula model (legacy formula). You can add the formula by clicking the “Add formula” button. 
   
   The following pop-up will appear. Click “+Add parent” to add a new row criterion to the calculation formula. Next, specify the criteria based on the position in the Job Position field and set the compensation component formula in the Amount field. You can also add or remove variable conditions using the “+” and “x” buttons, then click “Save” to save the formula settings. 
   

7. Next, you must select one of the options in the Compensation rate for unassigned shifts section. You can select “Per day” if the overtime compensation rate is calculated as a fixed amount per day. You can enter the amount in the “Amount” field. 
   

8. Alternatively, select “Custom multiplier” if overtime compensation is calculated progressively based on overtime duration ranges. You can specify the duration range in the “Overtime hours” field and enter the compensation multiplier in the “Multiplier” field (for example, in the example: 1–2 hours receive a 2x multiplier, 3–6 hours receive a 3x multiplier, or 7 hours and above receive a 4x multiplier of the hourly rate). In addition, if you want to remove an unnecessary rule level, click “Remove”. 
   
   

   Important
   If the duration exceeds a certain limit, you can leave the final range-hours field blank.

9. In addition, you can set a special overtime compensation policy for a specific shift by clicking “Add shift”. This will display the Compensation rate settings field according to the shift you specify in the “Select shift” section. Next, select the desired compensation calculation scheme, either “Per day” or “Custom multiplier”. To remove this policy, you can click the “-” icon.
   

10. In the Minimum overtime paid duration section, you can specify the minimum duration threshold for an employee's overtime to be calculated and paid. Enter the minimum overtime minutes before the work shift starts in the “Overtime payment before the shift starts” field, and the minimum overtime minutes after the work shift ends in the “Overtime payment after the shift ends” field.
    
    

    - Overtime payment before shift starts (minutes): The minimum duration before overtime calculation begins before the work start time. If you enter 60 minutes, overtime calculation will begin at the 61st minute. However, the first 60 minutes will still be paid.
    - Overtime payment after shift ends (minutes): The minimum duration before overtime calculation begins after the work shift ends. If you enter 60 minutes, overtime calculation will begin at the 61st minute. However, the first 60 minutes will still be paid.

11. In the Automatic deduct overtime duration section, you can automatically deduct overtime duration based on certain time criteria. You can enter the total overtime duration in the “For total overtime duration” field and specify the number of minutes to deduct in the “Automatically deduct by” field. In addition, you can enable the “Enable automatic deduct overtime duration by multiplier” option so that the duration deduction is calculated and applied to each overtime duration multiplier. 
    
    

    Example:
    - For example, a company applies a rule that every overtime period reaching a minimum duration of 4 hours (240 minutes) will automatically have 30 minutes deducted for break time. You can enter “240 mins” in the “For total overtime duration” field and “30 mins” in the “Automatically deduct by” field. Therefore, if an employee works 4 hours of overtime, the net overtime duration calculated and paid by the system will be 3 hours and 30 minutes. 
    - For example, your company applies an automatic deduction by enabling “Enable automatic deduct overtime duration by multiplier” with 30 minutes in the “Automatically deduct by” field for every minimum overtime duration of 240 minutes in the “For total overtime duration” field, then:
    A. 200 minutes of overtime → 200 minutes (the 240-minute requirement has not been met, so no deduction).
    B. 240 minutes of overtime → 210 minutes (the requirement is met, so 30 minutes are deducted).
    C. 500 minutes of overtime → 470 minutes (30 minutes are still deducted only once).
    - However, if “Enable automatic deduct overtime duration by multiplier” is disabled, then: 
    A. 240 minutes of overtime → 30 minutes deducted (1x multiple) → 210 minutes.
    B. 479 minutes of overtime → 30 minutes deducted (still 1x multiple) → 449 minutes.
    C. 500 minutes of overtime → 60 minutes deducted (2x multiple) → 440 minutes.
    D. 730 minutes of overtime → 90 minutes deducted (3x multiple) → 640 minutes.

12. Next, click “Create policy” to create and apply this policy.
    

B. Editing and Deleting an Overtime Policy

1. All overtime policy settings (Overtime policy setting) that you have created will be listed in the Overtime policy tab, including the system's Default policy settings. To make it easier to find settings, you can use the filter feature based on “Compensation” and the “Search bar” to search by policy name.
   
   

   - In the list, you can see the Default label in the Policy name column for the system's default settings.
   - In the Compensation type column, you can see the list of settings according to the compensation policy.
   - The Last modified column provides information about the date of the latest policy change and the name of the employee who made the update.

2. You can edit the policy rules by clicking “Actions”, then clicking Edit policy. To delete a policy rule, click Delete policy. 
   
   

   Important
   You cannot delete a policy that has already been assigned to an employee. To delete it, you can first move the employee to another policy.