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Deadwood Al
Level 5

Changes to eligibility for overtime rules from DOL

Effective July 1st, employees who are on a salary that is less than $43.4K annually will suddenly not be considered exempt from overtime, meaning that companies will have to track their hours and pay overtime based on their calculated hourly rate (annual salary + bonus / 2080).

 

I am curious about setting up the payroll tab in QB Enhanced payroll for this. I am still a bit new to QB payroll, and want to be sure I don't mess anything up. I'm assuming that I would leave the "salary" amount as is (example $35000) and then add a line for Hourly Overtime at ([removed])*1.5 = $25.25. When doing payroll, the Hourly Overtime would be zero hours except for times when the person worked more than 40 hours in a week. Is that correct? I've never tried to mix hourly pay and salary pay in the same person before.

 

Of course, this all begs the question as to why we would use a classification of "Salary, Non-Exempt" instead of "Hourly non-exempt"? The only difference is that it seems that if the person worked LESS than 40 hours, they would still get their normal salary, so the benefit goes only to the employee, not the organization. Or am I missing something?

Solved
Best answer May 28, 2024

Best Answers
JoesemM
Moderator

Changes to eligibility for overtime rules from DOL

Hello there, Deadwood Al. I appreciate the detailed information about your concern with the changes to eligibility over time.

 

In QuickBooks Desktop Enhanced Payroll, you'll need to set up an overtime pay time. Just choose the correct rate and manually add the overtime rate.

 

Also, you're correct that the Hourly Overtime would be zero hours except for times when the person worked more than 40 hours in a week. I'll show you how:

 

  1. Select Lists, then Payroll Item List.
  2. Choose the Payroll Item ▼ dropdown, then New.
  3. Click Custom Setup, then Next.
  4. Select Wage, then select Next twice.
  5. Choose Overtime Pay, then Next.
  6. Enter the name of the item. Select Next.
  7. Select the overtime rate you want to pay your employee, then Next.
  8. Click the Expense account (or add it) where you want to track the item. 
  9. Select Finish.

 

Once done, you can add the item to the employee's payroll information. Here's how:

 

  1. Select Employees, then Employee Center.
  2. Double-click the employee’s name.
  3. Choose Payroll Info.
  4. In the Earnings section, add the overtime pay item.
  5. Click OK.

 

Once done, you can now create a paycheck with overtime pay. For detailed steps about the process above, see this article: Add overtime pay to an employee.

 

Additionally, I'll be sharing these resources on other ways to calculate overtime and manage pay schedules in QuickBooks Desktop:

 

 

Let me know in the comments below if you have other questions about overtime pay in QBDT. I'll be sure to get back to you. Have a pleasant day.

View solution in original post

1 Comment 1
JoesemM
Moderator

Changes to eligibility for overtime rules from DOL

Hello there, Deadwood Al. I appreciate the detailed information about your concern with the changes to eligibility over time.

 

In QuickBooks Desktop Enhanced Payroll, you'll need to set up an overtime pay time. Just choose the correct rate and manually add the overtime rate.

 

Also, you're correct that the Hourly Overtime would be zero hours except for times when the person worked more than 40 hours in a week. I'll show you how:

 

  1. Select Lists, then Payroll Item List.
  2. Choose the Payroll Item ▼ dropdown, then New.
  3. Click Custom Setup, then Next.
  4. Select Wage, then select Next twice.
  5. Choose Overtime Pay, then Next.
  6. Enter the name of the item. Select Next.
  7. Select the overtime rate you want to pay your employee, then Next.
  8. Click the Expense account (or add it) where you want to track the item. 
  9. Select Finish.

 

Once done, you can add the item to the employee's payroll information. Here's how:

 

  1. Select Employees, then Employee Center.
  2. Double-click the employee’s name.
  3. Choose Payroll Info.
  4. In the Earnings section, add the overtime pay item.
  5. Click OK.

 

Once done, you can now create a paycheck with overtime pay. For detailed steps about the process above, see this article: Add overtime pay to an employee.

 

Additionally, I'll be sharing these resources on other ways to calculate overtime and manage pay schedules in QuickBooks Desktop:

 

 

Let me know in the comments below if you have other questions about overtime pay in QBDT. I'll be sure to get back to you. Have a pleasant day.

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