Add overtime pay to an employee

When an employee works more than 40 hours in a workweek, they must be paid overtime wages. Under the Federal Labor Standards Act (FLSA), overtime is paid to nonexempt employees at a rate of at least 150% of their regular hourly rate.

The FLSA requires overtime to be paid to nonexempt employees who work more than 40 hours in a work week. However, each state can set its own overtime requirements. When state law differs from the FLSA, you must follow the standard most protective to your employees. 

For a better experience, open this article in QuickBooks Online. Launch side-by-side view

1. Go to Payroll, then select Employees (Take me there).
2. Select your employee.
3. From Pay types, select Start or Edit.
4. In the Common pay types section, select Overtime Pay. (If applicable, select Double Overtime Pay.)
5. Select Save.

Step 1: Create the overtime pay item 

1. Select Lists, then Payroll Item List.
2. Select the Payroll Item ▼ dropdown, then New.
3. Select Custom Setup, then Next.
4. Select Wage, then select Next twice.
5. Select 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. Select the Expense account (or add it) where you want to track the item. 
9. Select Finish.

Step 2: Add the item to the employee

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