How to add overtime pay in QuickBooks payroll

In one of the research it was found that every company has some dedicated staff that is willing to work overtime as per the work demands. Also in some companies it is mandatory to work overtime shift wise or on rotational basis. In this way one or the other employee has to work overtime as per the companies rule. Hence, at the time of monthly settlement of Employees pay, companies has to consider their employees over time work hourly or weekly basis and has to calculate their pay including overtime pay. Now the question arises how to add overtime pay in QuickBooks payroll?

Definition of overtime

According to federal Labor standard act, only non-exempt employees are liable to claim for overtime pay. If a physical work of any employee exceeds 40 hours in a week are liable to claim for overtime. Hence, the time that exceeds 40 hours in a week is defined to be as overtime. According to federal Labor standard act, non-exempt employees who have worked more than 40 hours shall be paid minimum one  150% of their total regular pay.

According to the State overtime requirements, every state sets its own requirements for overtime. For example in some States it is necessary foreign for a non exempt employee who works more than 8 hours in a day should get 50% of overtime premium on daily basis. And if non exempt employee worked for more than 12 hours a day is liable to get 100% of overtime premium on daily basis.

All salaried employees are liable to get overtime pay except for those who meet all the requirements for exemptions and rendered their duties and responsibilities and having salaries exceeding certain level.

Special Feature in QuickBooks

QuickBooks offers some special features to their business owners for choosing it as best accounting software solutions. It makes all the accounting processes easier than manual accounting. Manual accounting requires lots of calculations and complicated methods for calculating overtime pay. But QuickBooks offer special feature of calculating and adding overtime pay in QuickBooks payroll. If you have salaried employees or wages based Employees who worked overtime, you need to set overtime pay in QuickBooks. You can get overtime output just by running payroll and enter the hours of overtimework in the overtime section.

Let us learn the process by which overtime pay can be set up in QuickBooks payroll.

Here are some easy steps

  • You need to navigate on to payroll menu.
  • Go to select employees
  • Employees name is to be selected respectively for whom overtime pay is due.
  • Beside the pay option, there is a pencil icon you need to click on it.
  • Enter the amount of making payment.
  • In the option dropdown, you will find pencil icon again. You need to click on it.
  • In the next step you will find checkbox, click it to get the overtime pay.
  • If double overtime is also due to any employee then you can click on check box.
  • At last you can click on done.

Identify the expected errors in calculating overtime pay

There must be some error while calculating overtime pay or you may face some issues in calculating overtime pay. Hence it becomes difficult to retrieve the output. Errors in calculating overtime pay can be identified by following some steps:

  • App and software settings that you are using need to be checked.
  • Navigate on to settings so as to re-check the payroll screen.
  • Ensure that over time pay settings are correctly entered. You need to recheck OT settings.
  • Navigate on to payroll summary.
  • Daily hours need to be selected to generate the overtime pay report for the definite period.
  • If the report so generated is correct, you need to understand that there must be some issue in QuickBooks setup.
  • Employee’s record in QuickBooks is to be checked again.
  • For this you need to Navigate to Employee tab.
  • Payroll tab is to be chosen for rechecking.
  • You need to ensure that all the payroll items for the employees have been included.
  • In the next step you will find use time data so as to create paycheck option.You need to ensure that it is set as on.
  • Wages or salary on overtime hours is to be set in QuickBooks payroll if it is not you must ensure all these details in QuickBooks.

We hope you find this article useful in understanding how to add overtime pay in QuickBooks pay.