How do I set up the over 40 hours, overtime pay code? (AL) (2024.02)
Set up a pay code for overtime pay received by a full-time hourly wage paid employee for hours worked above 40 in any given week. These employees are excluded from gross income and they are exempt from Alabama state income tax.
Adding the Over 40hrs, 1.5 pay code
1. Open Connect Payroll > Organization > Pay Codes.
2. Click New (CTRL+N).
3. Set up the Pay Code tab like this...
Pay code
Enter 2
Sub code
Enter 03
Title
Enter Over 40hrs 1.5
Abbreviated title
Enter OT40hrs1.5
Type
Select Gross Overtime.
State
Select AL.
Identification number
Enter your organization's identification number.
Calculation order
Click Modify Calculation Order and set the pay code calculation order to 12.
Add on new employee
Do not select the checkbox.
Allow employee options
Select the checkbox.
Allow employer options
Do not select the checkbox.
Allow payout payments
Do not select the checkbox.
Use as summarization pay code
Do not select the checkbox.
4. Set up the Employee tab > Employee tab like this...
Amount/Rate/Percent type
Select Hourly.
Rate
Enter 150.00
Maximum limit
Enter 00.00
Annual limit
Enter 00.00
Minimum wage limit
Enter 00.00
Maximum wage limit
Enter 00.00
Standard pay hours
Enter 00.00
GL account
Enter FF-DD-120.
GL activity
Enter 0
Calculation name
This field is not available. Skip it.
Employee allocation method
Select Use Employee Allocations.
Position
Select All Positions.
Position number
Enter 1
Round amounts to the nearest dollar
Do not select the checkbox.
Exclude hours
Do not select the checkbox.
Exclude hours for overtime calculation
Do not select the checkbox.
Monthly period numbers
Do not select the checkbox.
Allow calculations with these check types
Do not select any of the checkboxes in this section.
5. Set up the Employee tab > Used in Calculations tab like this...
Add the following pay codes to the Used in Calculations tab:
-
401-K deduction, 100%
-
Child support, 100%
-
Garnishment, 100%
-
Social security tax, 100%
-
Medicare tax, 100%
-
Additional Medicare tax, 100%
-
Federal withholding tax, 100%
-
SUTA - State Unemployment Tax, 100%
-
Workers compensation, 100%
5. Click Save (CTRL+S).
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