# Overtime Setup in Payroll

**YouTube:** [How to set up Overtime Calculation in Payroll?](https://www.youtube.com/watch?v=Yzx889eEic0)

## How to set up Overtime Calculation in Payroll?

In this tutorial, we will learn how to **configure and calculate Overtime (OT)** for payroll generation in **Logic ERP**.

***

### **Access to Grade Setup**

* Navigate to the **Main Menu** → **Payroll Setups** → **Setup Grades** window.
* Here, you can define overtime settings for both **new** and **existing grades**.
* Select the desired **Grade** and enable the checkbox:

> **“Use new calculation engine for overtime and undertime calculation.”**

<figure><img src="https://4031188996-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FXMVkjt8zqHBQX1c9QvFS%2Fuploads%2FZGPfy4yJD84dj3VqWSVK%2FCalculation%20Engine.png?alt=media&#x26;token=080c315c-ec73-4862-81e3-772b0775e3d3" alt=""><figcaption></figcaption></figure>

* This activates the overtime configuration options for that grade.

***

### **Configure Overtime Settings**

* Press the **Space Key** to open the configuration window.
* Now, set the following options:
  * **Enable OT Deduction** – to allow overtime computation.
  * **Calculate Overtime from Shift End Time** – ensures overtime is calculated only after the scheduled shift ends.

<figure><img src="https://4031188996-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FXMVkjt8zqHBQX1c9QvFS%2Fuploads%2Fak4uXQJR3E8tzdd3dSNX%2FOT%20Configuration.png?alt=media&#x26;token=4744e9cc-dd3f-4e46-8f74-7d8456722b00" alt=""><figcaption></figcaption></figure>

* **Overtime Rate as Field:**
  * Select **Actual** for a fixed rate per hour and specify the **Overtime Rate per Hour**.
  * To define a **custom calculation**, select **User Defined** from the dropdown.

<figure><img src="https://4031188996-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FXMVkjt8zqHBQX1c9QvFS%2Fuploads%2FeuLFz9lF8G7qMcjrrYQV%2FOT%20Rate%20As.png?alt=media&#x26;token=4dbc970d-c069-43e8-a6b6-7441de0bb16d" alt=""><figcaption></figcaption></figure>

* When using **User Defined**, press the **Space Key** on **OT User Defined Rate Setting** and tick the **Gross Components** (such as Basic, DA, or HRA) that should be included in overtime calculation.

<figure><img src="https://4031188996-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FXMVkjt8zqHBQX1c9QvFS%2Fuploads%2FTOMWS9I9a0uM5vnCFp5y%2FOT%20UD%20Rate.png?alt=media&#x26;token=2ce433d3-70d9-4859-8209-b290c71d4fcf" alt=""><figcaption></figcaption></figure>

* Next, configure additional parameters:
  * **Minimum OT Minutes** – define the minimum extra time that qualifies for overtime.
  * **Include Early Time in OT** – enable this option if early login before shift start should count toward OT.
  * **Minimum Early Time in Minutes** – specify how much early time will be considered.

<figure><img src="https://4031188996-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FXMVkjt8zqHBQX1c9QvFS%2Fuploads%2FyWmcsvcX4ZFmXuYW5ZsU%2FOT%20and%20UD%20Time.png?alt=media&#x26;token=41654086-6d28-4b03-8de5-00eea52d58ba" alt=""><figcaption></figcaption></figure>

* Once all configurations are complete, click **OK** to save the settings.

***

### **Mark Employee Attendance**

* Navigate to **Payroll Entries** → **Attendance Register**.
* Select the **Employee**, then define their **Time In** and **Time Out**.\
  For example:
  * Standard Shift: 8 hours
  * Actual Worked: 09:30 hours

<figure><img src="https://4031188996-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FXMVkjt8zqHBQX1c9QvFS%2Fuploads%2FG1lfAejJmgBxynr5I8wm%2FOT%20Time%20In%20and%20Out.png?alt=media&#x26;token=62f151a1-77c1-48b3-8510-45365409073a" alt=""><figcaption></figcaption></figure>

* Here, the employee worked **01:30 additional hours**, which will be considered as **Overtime**.\
  Click **Save** to record the attendance.

***

### **Generate Payroll**

* Next, go to **Payroll Entry** → **Payroll Generation**.
* Select the **Employee** and the **Payroll Month**, then click **Recalculate**.
* The system will display the payroll details on the screen, showing:
  * **Total Overtime Hours** ( 1.5 hours in this case)
  * **Overtime Salary** calculated as per the defined rate or user-defined formula.

<figure><img src="https://4031188996-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FXMVkjt8zqHBQX1c9QvFS%2Fuploads%2FK0vhRmrZ4qizVwjUJJXW%2FOT%20in%20Payroll.png?alt=media&#x26;token=9502e78f-0587-49eb-8261-57831e6904d1" alt=""><figcaption></figcaption></figure>

> #### **OT Formula Steps:**

* **Per Day Salary =** Total Monthly Salary ÷ Total Days in a Month
  * **Per Day Salary** = ₹100,000 ÷ 30 = **₹3,333.33**
* **Per Hour Salary =** Per Day Salary ÷ Total Working Hours per Day
  * **Per Hour Salary** = ₹3,333.33 ÷ 8 = **₹416.67**
* **Overtime Amount =** Per Hour Salary × Total OT Hours
  * **Overtime Amount** = ₹416.67 × 1.5 = **₹625.00**

***

### **Result**

You have successfully configured and calculated **Overtime** in **Logic ERP**.\
The system now automatically includes the OT amount during **Payroll Generation**, based on employee working hours and configured rate settings.


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