This article explains the overtime balance and tasks such as removing a time entry, paying out overtime, and time off in lieu. If you want to set up overtime policies, take a look at our article on Setting up Overtime.
For employees with an hourly salary, certain absences types (e.g. paid vacation or sickness) on workdays will be automatically included in payroll calculations, as long as the option Consider time tracked during absences of this type as overtime? is active for the respective absence type.
The Overtime & Deficit Hours Widget
If overtime and deficit hours are recorded based on the work schedule of the employee, an overview appears in the attendance view under the tab Attendance of the employee profile.
The individual values are composed as follows:
|Tracked||All overtime recorded within the month without deductions.|
|Month balance||Overtime balance at the end of the month, once overtime has been both approved and compensated (vacation days, payouts, etc).|
|Total balance||Overtime balance since time tracking began, once overtime has been approved.|
The Overtime Balance View
Click on the three dots icon within the Overtime & Deficit Hours widget and click on More Details to access the Overtime Balance view.
The Overtime Balance view gives you an overview of the individual overtime and deficit hours tracked by your employees, as well as the monthly overtime balances.
In this view, you can edit the overtime account as well as pay out overtime or convert it into time off.
For employees to be able to both edit the overtime balance and to compensate it through vacation time, you need to grant them editing rights for the Attendance data section. For employees to also be able to compensate overtime through payouts, you need to also grant them editing rights for the Salary information section.
Removing a time entry
Click on the bin icon beside each time entry to remove the overtime/deficit hours from a particular day.
Keep in mind that this action will not remove the time entry itself, but will help you to create a manual adjustment that offsets the overtime/deficit hours for this day.
Click on Edit balance to adjust an employee’s individual overtime balance as of a specific past or future date.
If you enter a negative value under Overtime Hours, this number of hours will be deducted from the balance. If the value is positive, the number of hours will be added.
- Click on Pay out to compensate overtime financially.
- In the Pay out window, enter the number of hours to be paid out, the hourly rate and the calculation factor.
The hourly rate is calculated with the following formula:
Fixed salary x 3 / 13 / department’s weekly hours (fixed salary x 3 months / 13 weeks / department’s weekly hours)
Personio uses a predefined formula to automatically calculate hourly rates based on monthly salary due to the calculation of the hourly wage being too dependent on annual conditions (for example, the number of public holidays in a month). However, amounts can also be adjusted manually.
A monthly fixed salary of €3,250 and 40 weekly working hours for the department.
3,250€ x 3/13 / 40 = €18.75
The employee is therefore paid €18.75 per hour of overtime.
- In Total payment, you will see a default rate based on the employee’s current monthly salary.
- In Payout day, enter the date for the change to take place.
- Click on Submit to perform the change. The respective employee will see the financial overtime compensation in their Salary tab.
Employees must be granted editing rights for employee salaries to be able to compensate overtime financially.
Convert overtime to compensatory time off
- Click on Convert overtime to comp to convert overtime into additional leave.
- In the Convert Overtime to Compensatory Time Off window, enter the number of overtime hours to be converted, as well as the conversion factor.
The conversion factor is calculated with the following formula:
8 / x = factor (with x being the number of hours required for one day of leave)
The most commonly applied factors are 0.5 (16 hours overtime required for one day of leave), 1 (8 hours required for one day of leave) and 2 (4 hours required for one day of leave).
The factor-based calculation is independent of the defined working schedule, so when a factor 1 is applied, 8 hours of overtime are required even for employees who only work 4 hours per working day.
- In Compensatory time, you will see the number of new days/hours off to be generated as a result.
- Click on Convert to perform the change. The respective employee will see the additional leave in their Absence tab (under the respective absence type).
Overtime can only be converted to absence types subjects to accruals. If you would like to have leave in lieu of overtime worked shown separately from normal leave, you can create an additional absence type for overtime. To do this, it is essential that accrual policies are enabled, and a rule is defined for 0 days per year and assigned to employees.