Pay rule calculation examples
If your Administration > Pay Codes and Policies menu shows Overtime Rules rather than Pay Rules, refer to Overtime rule examples for examples relevant to your instance.
Pay rules are used to determine which pay codes hours are allocated to. You can use the pre-defined pay rules for your region or create a new rule to match your company's policies. The following scenarios are the most common:
- Weekly Overtime
- Daily & Weekly Overtime
- Daily & Weekly Overtime with Holiday Pay (Canada)
- Weekly Overtime, 7th Day Premium
- Daily Overtime, Weekly Overtime, 7th Day Premium
Weekly Overtime
An employee is paid $30/hr.
In one week, they work 43 hours.
If they are assigned a weekly pay rule with the parameter given below, they will be paid overtime as outlined.
|
Parameter |
Condition |
Overtime Pay |
|---|---|---|
|
Weekly Threshold |
1.5 x hourly rate for more than 40 hours in a Work Week |
43 - 40 = 3 hours overtime 3 x 1.5 x $30/hr = $135 |
Therefore, the employee will be paid $135 in overtime pay that week.
Daily & Weekly Overtime
An employee is paid $30/hr.
In one week they work for 8 hours each day from Sunday to Wednesday, 9 hours on Thursday, and 10 hours on Friday. They have Saturday off.
If they are assigned a daily & weekly pay rule with the parameters given below, they will be paid overtime as outlined.
|
Parameter |
Condition |
Overtime Pay |
|---|---|---|
|
Daily Threshold OT |
1.5 x hourly rate for more than 8 hours in a work day |
9 hours worked on Thursday = 1 hour daily overtime 10 hours worked on Friday = 2 hours daily overtime 3 x 1.5 x $30/hr = $135 |
|
Weekly Threshold |
1.5 x hourly rate for more than 40 hours in a Work Week |
(8 x 4) + 9 + 10 = 51 hours worked 51- 40 = 11 hours overtime 3 hours of overtime are already accounted for by the Daily Threshold. Therefore: 11 - 3 = 8 hours weekly overtime 8 x 1.5 x $30/hr = $360 |
Therefore, the employee will be paid $135 + $360 = $495 in overtime pay that week.
Daily & Weekly Overtime with Holiday Pay (Canada)
An employee is paid $30/hr.
In one week they work for 8 hours each day from Sunday to Tuesday, 7 hours on Wednesday, and 9 hours on Thursday. They have Friday and Saturday off. Additionally, the Monday is a statutory holiday.
The holiday pay calculation in this example is based on the Alberta legislation and is for illustrative purposes only. Holiday pay is calculated differently for each Canadian province or territory, depending on the specific legislation for the region.
If they are assigned a daily & weekly pay rule with the parameters given below, they will be paid overtime as outlined.
|
Parameter |
Condition |
Overtime Pay |
|---|---|---|
|
Daily Threshold OT |
1.5 x hourly rate for more than 8 hours in a work day |
9 hours worked on Thursday = 1 hour daily overtime 1 x 1.5 x $30/hr = $45 |
|
Weekly Threshold |
1.5 x hourly rate for more than 40 hours in a Work Week |
(8 x 3) + 7 + 9 = 40 hours worked Thus, no hours qualify under this parameter. 0 x 1.5 x $30/hr = $0 |
|
Holiday Pay |
1.5 x hourly rate for hours up to 8 worked on a designated holiday. |
8 hours worked on Monday, which is a regular work day for the employee. 1.5 x 8 x 30 = $360 |
Therefore, the employee will be paid $45+ $360 = $405 in overtime pay that week.
Weekly Overtime, 7th Day Premium
An employee is paid $30/hr. They have a Work Week than runs from Sunday to Saturday.
In one week the employee works for 9 hours each day from Sunday to Thursday, 8 hours on Friday, and 8 hours on Saturday.
If they are assigned a weekly overtime with 7th day premium pay rule with the parameters given below, they will be paid overtime as outlined.
|
Parameter |
Condition |
Overtime Pay |
|---|---|---|
|
Weekly Threshold OT |
1.5 x hourly rate for more than 40 hours in a Work Week |
The 40 hour threshold is reached partway through Thursday. This yields 5 hours overtime on Thursday and 8 hours overtime on Friday. 5 + 8 = 13 hours overtime 13 x 1.5 x $30/hr = $585 The Saturday hours qualify under 7th Day Premium |
|
7th Day Premium |
2 x hourly rate for hours worked on the 7th consecutive day in a Work Week |
8 hours on Saturday, the 7th day of the Work Week 8 x 2 x $30/hr = $480 |
Therefore, the employee will be paid $585 + $480 = $1065 in overtime pay that week.
Daily Overtime, Weekly Overtime, 7th Day Premium
An employee is paid $30/hr. They have a Work Week that runs from Sunday to Saturday.
One week, they work for 8 hours each day from Sunday to Thursday, 12 hours on Friday, and 10 hours on Saturday.
If they are assigned pay rule with daily overtime, weekly overtime, and 7th day premium parameters as given below, they will be paid as outlined.
|
Parameter |
Conditions |
Overtime Pay |
|---|---|---|
|
Daily Threshold OT |
1.5 x hourly rate for more than 8 hours in a work day |
12 hours worked on Friday 12 - 8 = 4 hours overtime 4 x 1.5 x $30/hr = $180 (The Saturday hours qualify under 7th Day Premium) |
|
Daily Threshold DT |
2 x hourly rate for more than 12 hours in a work day |
No days with more than 12 hours = $0 |
|
Weekly Threshold |
1.5 x hourly rate for more than 40 hours in a Work Week |
(8 x 5) + 12 + 10 = 62 hours worked 62 - 40 = 22 hours overtime 4 of those hours qualify under Daily Threshold OT, and 2 hours qualify under 7th Day Premium 22 - 6 = 16 hours weekly overtime 16 x 1.5 x $30/hr = $720 |
|
7th Day Premium |
1.5 x hourly rate for the first 8 hours on the seventh consecutive day in any Work Week, regardless of the number of hours worked in the previous 6 days 2 x hourly rate for hours beyond 8 on the 7th consecutive day in any Work Week, regardless of the number of hours worked in the previous 6 days |
Of the 10 hours worked on Saturday, 8 are accounted for under Weekly Threshold The last 2 hours of Saturday qualify under the second part of this parameter 2 x 2 x $30/hr = $120
|
Therefore, the employee will be paid $180 + $0 + $720 + $120 = $1020 in overtime pay that week.
Related links
Setting up pay rules
How is pay calculated?
Assigning and reviewing pay rates
About the 9/80 Alternative Schedule pay rule
How payroll works
