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jowens-arcticair
Level 1

Must an employer take bonuses into account when figuring an hourly employee's overtime pay? I have been told I should and am confused at why QB would not do that for me.

 
5 Comments 5
IamjuViel
QuickBooks Team

Must an employer take bonuses into account when figuring an hourly employee's overtime pay? I have been told I should and am confused at why QB would not do that for me.

Hello, @jowens-arcticair.

 

Depending on the overtime requirements your State sets, just make sure to enter your payroll information in QuickBooks. The system automatically calculates overtime pay when you set up the Overtime (OT) pay type for your eligible hourly employees.

 

When you run payroll, just make sure to enter the overtime hours in the OT box.

 

You don’t need to manually multiply the overtime wages by 1.5. You can read through this article for more detailed steps in setting up the overtime pay item: Add overtime pay for an employee.

 

Also, you can check these articles to learn more about managing payroll items and reports in QuickBooks:

Lastly, I'd recommend consulting with your accountant so you'd be guided in managing your payroll transactions.

 

Know that I am always here to help if you have other questions, feel free to leave your comments below.

john-pero
Community Champion

Must an employer take bonuses into account when figuring an hourly employee's overtime pay? I have been told I should and am confused at why QB would not do that for me.

Federal OT rule is anything above 40 hours in a 7 day period gets time and a half. Some states mandate daily over 8. Check your state.

 

But a bonus is just a bonus and is not calculated by hours and there is no such thing as OT on bonus or even commissions 

Rivera4
Level 1

Must an employer take bonuses into account when figuring an hourly employee's overtime pay? I have been told I should and am confused at why QB would not do that for me.

Under the FLSA rules, if an employer is paying non-discretionary bonuses or commission, that amount must be factored into the overtime rate. It is a complicated formula, which is why I am here doing research as to how can you incorporate this formula into QuickBooks. It is a rule under the FLSA, so I am trying to understand why I am not finding information easily. 

jtwinters
Level 1

Must an employer take bonuses into account when figuring an hourly employee's overtime pay? I have been told I should and am confused at why QB would not do that for me.

Struggling with same issue. The FLSA requires that overtime pay be calculated on an employee's regular rate of pay, and any nondiscretionary bonuses an employee earns must be factored into the employee's regular rate of pay for OT calcs. Does QBO support this???

Rivera4
Level 1

Must an employer take bonuses into account when figuring an hourly employee's overtime pay? I have been told I should and am confused at why QB would not do that for me.

I have been in contact with QB about this and they do not support this. It is mind boggling to me that one of the biggest payroll companies can't offer options to the many different ways of pay that are acceptable under the FLSA. Unfortunately, it has been my experience that most of the employees are account technicians with no education or formal training on these topics. 

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