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The number of extra hours that an employee works after their shift ends is considered as overtime. The Overtime Settings page helps you to define a policy's various attributes such as name, block time, break hours, etc. You can view the following settings after you create your first overtime policy:

  1. General Settings
  2. Eligibility Settings
  3. Payout Settings
  4. Overtime Summary

To create an Overtime (OT) policy, click the Settings icon on the top right corner of the application. Navigate to System Settings > Attendance > Overtime Policy > Create Overtime Policy.


General Settings

After creating your first policy, you can view all the settings on the Overtime page.

The General Settings include the following sections:

  1. Category Selection
  2. Policy Name
  3. Policy Description
  4. Category values 

Category Selection

This setup is available only for the first time. Category selection is recommended to be used only when a single category is available for the entire company. Once you have set up a category, it is set for all the overtime policies in future. To set up a category, perform the following actions:

a. Enable Category Selection.


b. Click Setup Now. The Category Setup pop-up window appears:


c. Select a category from the Select Category drop-down list.
d. Click Confirm to select the category.

Policy Name

In the Policy Name text box, enter the name of the policy. The policy name must not exceed 60 characters.

Policy Description

In the Policy Description text box, enter a short description of the policy. You can include the purpose of the policy or define the group of employees who will be included in the policy.

Category values

The Category values drop-down list includes all the components of the category you have selected in the Category Selected setting of the OT policy. When an employee is added in the application with the same category value as the OT policy, the employee is automatically assigned to the OT policy. An employee is assigned to the policy from the date when a category is added to the policy. You can select multiple values at a time.

Let us understand the Category values with the help of the following examples: 

Example 1: 

Let's assume you have created a category called Overtime. In the Overtime category, you have added category values like Paintshop, Welding, Moulding, etc. Now, consider that you are adding an employee in the application. In the Add Employee settings, as soon as you select a category value as Paintshop under Overtime category, this employee is automatically assigned to the respective overtime policy.

Example 2:
Consider that you have created a policy as Nightshift policy. In this policy, assume category selection is Location. Based on the location, there are Category values such as Delhi, Bangalore, Chennai, etc. You have selected Bangalore. When an employee in Bangalore gets added to the application he/she will be auto-assigned to the Nightshift policy. 

Click Save to save the policy settings you have configured. If you want to review the settings you have configured and then submit the policy, click Review and Submit. You will be redirected to the Summary settings.

Eligibility Settings

Eligibility Settings help you in defining the eligibility of overtime hours for an employee. This criterion is based on many factors such as the rest time provided to the employees after shift, the maximum number of hours for which an employee can apply overtime etc. The Eligibility Settings page includes the following sections:

  1. Break Hours
  2. Maximum Overtime
  3. Eligibility Calculation
    a. Minimum hours for overtime eligibility
    b. Block time for overtime calculation
    c. Overtime round off to block time

Break Hours

Break hours is the rest time allowed to all the employees after the ending of shift and the beginning of overtime hours. You can configure the rest time as per your company policy in the Break Hours settings. This rest time is then deducted from the employee’s overtime hours for the purpose of calculating overtime pay. The Break Hours 00:00 is in the hh:mm format. 

For example, an employee works for three hours as overtime on a Half Day, and you have defined 30 minutes as Break Hours. Our application deducts 30 minutes from a total of three hours of overtime. The employee is paid overtime for two hours and thirty minutes.

Break hours can be configured for the following day types:

  • All: Adding break hours in All text box applies the break hours to all the day types. 
  • Rest Day: Adding break hours in Rest Day text box applies the break hours to employees who work on a rest day.
  • Off Day: Adding break hours in Off Day text box applies the break hours to employees who work on an off day.
  • Holiday: Adding break hours in Holiday applies the break hours to employees who work on a holiday.
  • Regular Day: Adding break hours in Regular Day applies the break hours to employees who work overtime on a regular day.
  • Half Day: Adding break hours in Half Day applies the break hours to employees who work overtime on a half day.


Kindly note that as you enter a value in All day type, all the day types will have the same value as entered in the All text box. If a value entered in any other day type is different from the other day types, then the value entered in All text box will become 00:00. You can customize different timings for different day types.


Consider a situation where you have allotted 15 minutes as the Break Hour for day type Rest Day.
Example 1: An employee has worked for 3 hours as overtime on a rest day. Our application will deduct 15 minutes from a total of 3 hours of overtime. The gross OT will become 2:45 minutes.
Example 2: An employee has worked for 15 minutes as overtime on a rest day. Then the gross OT will become 0 minutes.

Maximum Overtime 

As per the statutory requirement, every company must ensure the number of overtime hours an employee works are well within the statutory limit. Therefore, companies prefer to set a maximum limit for overtime hours. greytHR provides you with an option to set this maximum limit. The maximum limit can be set for the following periods of time: Daily, Weekly, Monthly, and Quarterly.

Kindly note that this information gets validated on the Apply Overtime page only when an OT admin applies for overtime. The order of validation is Quarterly, Monthly, Weekly, and Daily.


Eligibility Calculation 

a. Minimum hours for overtime eligibility

In this setting, you can specify the minimum time that must be served by an employee to qualify for the overtime. This time is calculated after the break hours is deducted from the total number of extra hours worked by the employee. An employee cannot claim overtime unless the employee works for the number of hours configured in “Minimum hours for overtime eligibility” after the break hours.
Consider the following example to understand the overtime pay calculation:

Policy settings:
Break Hours: 30 minutes

Shift time: 9 a.m to 6 p.m

Minimum hours: 1 hour

Calculation for Eligibility:

Break Hour: 6 p.m to 6:30 p.m

Minimum hour for overtime eligibility: 6:30 p.m to 7:30 p.m
As per the above policy settings, the employee is eligible for overtime, if he/she works up till or more than 7:30 p.m.

b. Block time for overtime calculation and Overtime to round-off to block time

Usually, employees don’t work for exactly 3 hours or 4 hours. They might finish work in3 hours and 10 minutes or 3 hours and 59 minutes. In such cases, the application must round off the overtime hours. Block time for overtime calculation and Overtime to round-off to block time settings help you in rounding off overtime hours with great ease.

Block time for overtime calculation
The application calculates overtime hours by the amount of time specified in the Block time. The minimum time is one minute. In such case, the application will round off overtime to the closest whole minute. For example, you have assigned blocks of 15 minutes. The application will pay overtime in blocks of 15-minutes each and round off each block as per the round-off settings. 

Overtime to round-off to block time
There are four types of round-off in the Overtime to round-off to block time drop-down list. You can choose the way round-off calculation is done in the application by selecting an option from the drop-down list.  Let's understand these round-off definitions by assuming Block time as 15 minutes: 

  • Round up:  Any overtime between 0 to Block time (15 min) will be rounded up. For example, 2 hours and 20 minutes become 2 hour and 30 minutes.
  • Round down: Any overtime between 0 to Block time (15 min) will be rounded down, For example, 2:20 minutes becomes 2:15 minutes.
  • Normal round: In the Normal round-off, Block time (15 min) is divided into half. Any overtime between 0 to half-block time (7 min 30 sec) is rounded down. Any overtime from half block (7 min 30 sec) time to full block time (15 min) is rounded up. For example, 15 minutes Block time is divided by 2 (7 min 30 sec). The calculation for 2:18 minutes becomes 2:15 minutes and 2:23 min becomes 2:30 respectively.
  • No roundoff: No Block time will be considered. For example, if overtime is 23 minutes and 15 seconds, payment will be done exactly for the overtime done.

Click Save to save the policy settings that you have configured. If you want to review the settings you have configured and then submit the policy, click Review and Submit. You will be redirected to the Summary settings.

Payout Settings 


The Payout Settings enables you to calculate payments for overtime done by employees. The payout is calculated based on either a flat structure or a pre-calculated component added in the salary. Few companies pay based on the day type and some pay based on the shifts. 

The Payout Settings includes the following sections:  

  1. Calculation Type
  2. Overtime Calculation Method
  3. Overtime Pay-Rate Calculator


Calculation Type

For calculating overtime payout, you must choose between Day Type or Shift. In greytHR, Day Type is the default Calculation Type

Overtime Calculation Method

For overtime payout calculation, you must choose a calculation method along with the Calculation Type. There are two ways in which you can calculate overtime payout.

  1. Flat (keep this in bold)This option allows you to specify a fixed amount for each overtime hour. Flat rate is a numeric value denoted in rupees.
  2. Component: This option allows you to specify a component from the payroll such as basic, gross etc. The component can then be selected as a multiplying factor for the payout.

Overtime Pay-Rate Calculator

The calculation is done either on the fixed rate you specify or based on the payroll component you select. This payroll component is indicated as x for the calculation purpose.

Let us consider the following scenarios to better understand the pay-rate calculations:

Calculation of Overtime Pay-Rate based on Flat method

Use case 1: 

Calculation Type: Day Type and Overtime Calculation Method: Flat


You can define a flat rate in the table in the following two ways:

  • Enter the amount in All text box. In such a case, the amount you entered is applicable for all the day types.
  • Enter separate amounts for all the different day types. Here, All text box will remain blank.


If a flat amount is entered for All text box, then all the day types across the row will have the same values as entered in All text box. You can still change the individual entries for all day types. In this case, the All text box becomes blank.


Use case 2: 

Calculation Type: Shift and Overtime Calculation Method: Flat

In the above table, the Shift Type column displays all the shifts created in the Attendance module automatically. You can define a flat rate in the table in the following two ways:

  • Enter the amount in All column against all the Shift Type. In such a case, the amount you entered is applicable for all the day types.
  • Enter the amount in each day type separately against the required shifts.


  • When a flat amount is entered for All column, then all the day types across the row will have the same values as entered in All column. You can still change the individual entries for all day types. In this case, the All column becomes blank.
  • It is mandatory to enter a flat rate for all the shifts.


Calculation of Overtime Pay-Rate based on the Component method

Select Payroll Component

You must select an OT payroll component (x) for calculating the pay-rate from the Select Payroll Component drop-down list. These components can either be any existing payroll component such as Basic, Gross, DA, etc or a component which you have configured. You can configure the component by creating a formula such as Basic + DA for the component from the Payroll Repository page. After you create the formula on Payroll Repository page, it can be added to the Select Payroll Component drop-down list.

The OT payroll component (x) is multiplied with the values available in the table under each day type drop-down list. By default, greytHR offers 0x, 1x, 2x, 3x, and 4x as the list of values. Some (Few) users want to configure the list of values such as 1.25x or 2x.
To configure the list of values, navigate to the following path:  System Settings > General > List of Values. Add the values under Overtime Payroll Multiplier.

Use case 3: 

Calculation Type: Day Type and Overtime Calculation Method: Component

Select an OT Payroll Component from the drop-down list. You can enter the list of values in the table in the following two ways:

  • Enter the value in All text box. In such a case, the value you entered is applicable for all the day types.
  • Enter separate values for all the different day types. Here, All text box will remain blank.

When a flat amount is entered for All text box, then all the day types across the row will have the same values as entered in All text box. You can still change the individual entries for all day types. In this case, the All text box becomes blank.

Use case 4: 

Calculation Type: Shift and Overtime Calculation Method: Component

Select an OT Payroll Component from the drop-down list. In the table, the Shift Type column displays all the shifts created in the Attendance module automatically. You can enter the list of values in the table in the following two ways:

  • Enter the amount in All column against all the Shift Type. In such a case, the amount you entered is applicable for all the day types.
  • Enter the amount in each day type separately for all the shifts.
  • When a flat amount is entered for All column, then all the day types across the row will have the same values as entered in All column. You can still change the individual entries for all day types. In this case, the All column becomes blank.
  • It is mandatory to enter a flat rate for all the shifts.

Click Save to save the policy settings you have configured. If you want to review the settings you have configured and then submit the policy, click Review and Submit. You will be redirected to the Summary settings.

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Overtime Summary


Overtime Summary settings display an overview of all the settings that you have configured in General, Eligibility, and Payout settings. You can view Important Details of a policy such as the date on which policy was created and modified, how many employees have been assigned to the policy etc. You can also activate a policy in Summary settings. 

The Summary Settings includes the following sections:

  1. Include Unselected Rules
  2. Important Details
  3. Overview of General, Eligibility, and Payout settings.




Include Unselected Rules

This option is not selected by default. This means that in summary, you will only see the settings which you have configured up till now. Selecting the Include Unselected Rules option displays all the settings. Even the settings which you have not configured will also be visible  You can configure or edit any setting by clicking the arrow next to them at any point in time. 

Important Details

Important Details include the following details: 

  1. Effective From: This indicates the date from which policy is active or scheduled to be active. When the policy is in DRAFT state, "-" is displayed.
  2. Assigned Employees: This indicates the number of employees assigned to the policy. When there are no employees assigned, "0" is displayed.
  3. Last Modified Date: This indicates the latest date on which the policy was saved. When there is no modification date, "-" is displayed.
  4. Last Modified By: This indicates the name of the employee along with his/her employee Id. When no one has modified the policy, "-" is displayed.
  5. Details: For more details about the policy such as Created By and Created Date, you can click Info. Important Details pop-up appears with the additional details.

Activating the Policy

You can create and activate a policy at any point in time or schedule the activation of policy at a later date. It must be noted that saving a policy in settings will not activate the policy by default. Perform the following actions to activate a policy:

  1. Navigate to policy SUMMARY settings.
  2. Click Activate. Activate Policy popup appears.
  3. Select policy activation date from the Effective From drop-down calendar.
  4. Enter remarks in the Remarks text box.
  5. Click Activate to set a date from which the policy will be activated. 

Kindly note that once a policy is activated (Active state), you cannot change any settings in the policy. You can only view the policy in read-only mode. 







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