How do I determine my overtime pay?
The working time of persons employed under an employment contract should usually not exceed 8 hours a day and 40 hours in a five-day working week. Employers have the option of extending the daily allowance by introducing an appropriate system and schedule of working time. However, there may still be a situation in which employees are entrusted with extraordinary work. Does the employer pay overtime pay in such situations?
Overtime - definition
The definition of overtime is included in Art. 151 § 1 of the Labor Code. It is work performed in excess of the working time standards applicable to the employee and work performed in excess of the extended daily working time, resulting from the applicable system and working time schedule. According to the regulations, overtime is possible when:
- it is necessary to conduct a rescue operation to protect human life or health, property or the environment, or to remove a failure;
- there are specific needs of the employer.
Overtime work and free time
When an employee performs work exceeding the required schedule, he or she is entitled to compensation, which may be granted in the form of time off. The amount of time off for overtime depends on who comes up with the initiative of such settlement: whether the employee or the employer. If it is:
- an employee, then the free time is granted in the same amount as the overtime hours (i.e. 1: 1);
- employer - the amount of free time is half of the amount of overtime (i.e. 1: 1½).
Where overtime cannot be accounted for with time off, the employee must be paid overtime pay.
Art. 151 of the Labor Code
"1. For overtime work, in addition to the normal remuneration, a supplement is due in the amount of:
1.100% of remuneration - for overtime work for:
a) at night;
b) on Sundays and public holidays that are not working days for the employee, in accordance with the working time schedule applicable to him;
c) on a day off from work granted to the employee in exchange for work on Sunday or on a public holiday, in accordance with the schedule of working time applicable to him.
2. 50% of remuneration for overtime work falling on any day other than that specified in point 1 ".
Normal overtime pay
The concept of normal remuneration was defined by the Supreme Court in its judgments of June 3, 1986 (I PRN 40/86), of June 22, 2011 (II PK 3/11) and of February 15, 2012 (I PK 156/11). According to them, normal remuneration is one that an employee receives on a regular and systematic basis. So it consists of:
- basic salary (the rate of personal grade);
- other fixed components of remuneration; among them there may be: internship allowance, functional allowance, permanent bonus, other permanent allowances.
When calculating your normal overtime pay, you must:
- add fixed salary components;
- Divide the sum obtained by the working time applicable in a given month (we will get the rate for one hour);
- Multiply the received rate by the number of overtime hours worked.
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Ms Anna works full-time in the basic working time system (from Monday to Friday). It is subject to a one-month billing period. Her basic salary is PLN 4,500, internship bonus - PLN 500 and a functional allowance - PLN 1,080. In November 2020, due to special reasons, she additionally worked:
- on Friday 13 November 2 hours (h);
- on Sunday, November 22, 8 hours (h).
The resulting overtime was not compensated with free time.
Calculation of the normal remuneration for overtime:
- PLN 4,500 (basic salary) + PLN 500 (internship allowance) + PLN 1080 (functional allowance) = PLN 6080.
- PLN 6,080: 160 h (nominal working time in November 2020) = PLN 38.00 / h.
- Normal remuneration for overtime will be PLN 38.00 x (2h + 8h) = PLN 380.
For overtime, the employee also receives an overtime bonus. It is based on the employee's remuneration resulting from his personal grade (determined by the monthly or hourly rate), and if such a component has not been separated - 60% of the remuneration. The remuneration resulting from the personal grading of the employee necessary to calculate the overtime allowance in accordance with the judgment of the Supreme Court of April 3, 2007 (II PZP 4/07, OSNP 2007 / 21-22 / 307) is only the base salary. In order to calculate the allowance, it must be determined whether the remuneration components are:
- at a fixed monthly rate - it is then divided by the number of working hours to be worked in a given month (nominal working time for a given month);
- variable - then the rules apply as for the calculation of remuneration for annual leave.
Ms Anna (example 1) should receive an allowance for overtime in addition to her normal salary.
Calculation of the allowance for 1 hour of overtime: PLN 4,500 (basic salary - the basis for calculating the allowance): 160 h (nominal working time in November 2020) = PLN 28.13 / hour.
Extra work allowance on Friday (50%) for 2 hours PLN 28.13 x 2 hours x 50% = PLN 28.13.
Supplement for work on Sundays (100%) for 8 hours: PLN 28.13 x 8 hours = PLN 225.04.
Total allowances for overtime will amount to: PLN 225.04 + PLN 28.13 = PLN 253.17.
Remuneration for overtime in the wFirma.pl system
HR systems allow for the settlement of working time, including overtime. One of them is the wFirma.pl system, in which you can easily settle free overtime or calculate wages for overtime. In the system, in the PERSONNEL »EMPLOYEES tab, in the employee details, go to Work time records, where you can settle overtime through Actions» Working hours.
After entering the data, the system will automatically calculate the normal salary and the overtime allowance when generating the payroll (HR »PAY LISTS» MENU »COLLECTIVE» ADD WAGE LIST). Thanks to this, settling overtime will be very quick and pleasant.