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Overtime Averaging

Configure when overtime applies across a specified period of time

Updated over a week ago

Overtime averaging is a way for an employer and employee to average hours over a custom defined period. The period can be in weeks, or a month.

If there is an agreement to use overtime averaging, an Admin can configure this:

  • Account wide

  • To all employees classified under a certain Earnings Rule or Earnings Template

  • On an per employee basis

To set the contracted weekly hours for the (weekly) period, an 'Overtime Period' Earnings rule must be created:

The contracted weekly hours (overtime period) + Overtime Averaging period will determine the calculation of the averaging.


  • Overtime Period hours = 38

  • Overtime Averaging = 2 (weeks)

Overtime will only apply once 76 hours have elapsed in a 2-week period.

Account Wide Overtime Averaging

If all employees have the same overtime averaging agreement:

  1. View all timesheet settings

  2. Expand to Show Advanced Settings.

  3. Specify the period of time for averaging under the Overtime Averaging field.

    • This can be either in weeks or a month

Weekly Overtime example:

Monthly Overtime example:

Managed Template

If using a managed template:

  1. Head to Compliance.

  2. Click 'Manage' next to the relevant template.

  3. Select 'Edit' under Maximum Shift Length.

  4. Switch to the Period of Ordinary Hours tab.

  5. Specify the period of time for averaging under the 'Overtime averaging period' field and the period start date.

  6. This can be either in weeks or a month

  7. Click Save.

Weekly Overtime Example:

Monthly Overtime Example:

Individual Overtime Averaging

If certain employees have an an arrangement for overtime averaging:

  1. Enable Advanced Payroll Fields under Settings > Feature Management

  2. Once enabled, head to Workforce > Staff.

  3. Open the profile of the relevant staff member.

  4. Switch to the Payroll tab on the profile.

  5. Specify the period of time for averaging under the 'Overtime averaging period' field and the period start date.

    • If Monthly, select the start day of the 'month'

  6. "Update" employee details.

Weekly Overtime example:

Monthly Overtime example:


Can I use account-wide averaging and individual averaging?

You can use a combination of averaging settings within an account. Settings on individual employee profiles will override settings inherited from the Earnings Rule template or organization-wide settings.

How is Monthly Overtime Averaging calculated?

The calculation for Monthly Overtime Averaging varies depending on the day on which the 'month' begins (as set on the individual, organization, or earnings setting):

  • If calendar month: ((weekly contracted hours* days in the month))/ 365 * 52 = Monthly contracted hours.
    For example, this is the calculation for an employee who is contracted for 40h a week:
    40*30 = 1200.
    1200 / 365 = 3.3
    3.3 * 52 = 171.6h for monthly overtime

  • If non 'calendar' month:

    • Days between the period are calculated (e.g. 10th May - 10th June), excl. the end day

    • ((weekly contracted hours * days in the month)) / 365 * 52 = Monthly contracted hours

In both circumstances, the overtime rule will apply once Monthly contracted hours have elapsed.

*When enabling Monthly Overtime, if the number of worked hours doesn't equate to exactly one minute, we will round up to the closest minute.

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