An overtime policy defines how Sage HR classifies overtime hours for employees in a timesheet group. It helps you track, report, and manage overtime according to your organisation's requirements.
Each employee who records overtime belongs to a timesheet group. Each timesheet group must link to an overtime policy.
📎NOTE: Changing or deleting an overtime policy doesn't affect timesheet permissions or approval workflows.
📌TIP: Set up your timesheet groups before you configure overtime policies.
📎NOTE: Employees must have a working pattern with daily hours configured for daily overtime to function. Without this baseline, the system cannot calculate daily overtime.
Overtime categories
Each overtime policy contains one or more overtime categories. Overtime categories help you track different levels of overtime based on defined thresholds.
You can use overtime categories to:
Report on overtime clearly
Export overtime data for payroll processing
Identify excessive or unusual overtime patterns
Default overtime policy
Sage HR creates a default overtime policy when you first set up the system and assigns it to all timesheet groups automatically.
If all employees follow the same overtime rules, you can continue using the default overtime policy. You can make some changes to this default policy, however, you can't change its tracking method from daily. If you want it to track per period, you would need to create a new overtime policy. 📌TIP: If daily overtime does not net to zero and offsetting is desired, consider using Time Off in Lieu (TOIL) instead of overtime. 📎NOTE: Sage HR does not support pre-assigned overtime within the working pattern. Employees must update their timesheets to reflect additional hours worked.
Understanding Daily vs. Per Period Overtime
Sage HR supports two types of overtime calculations:
Daily Overtime: Extra hours above the employee’s daily working pattern are immediately counted as overtime for that day, regardless of hours worked on other days.
Per Period Overtime: Overtime is calculated against the total expected hours for the entire period (e.g., a week). Extra hours on one day can offset fewer hours on another, with only hours above the period total counting as overtime. Note that overtime cannot be calculated simultaneously for both daily and per-period rules. You must choose one method.
Multiple overtime policies
You can create additional overtime policies when different groups of employees follow different overtime requirements. If duplicate policies exist, you can merge them by moving groups into the correct policy and deleting the extras. This ensures streamlined management and avoids redundancy.
Multiple overtime policies can help when:
Different employees have different overtime entitlements
Teams need separate overtime tracking rules
Payroll and reporting requirements vary between groups
After you create an overtime policy, assign it to the relevant timesheet groups.
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