Overtime when a week is split across two pay periods
A 45-hour week that straddles month end can look like no overtime at all. Here is why, and how to count it properly.
6 min readFor payroll, owners and managers
In short
- Weekly overtime belongs to the week, not the pay period. Count the whole week first.
- If you count each half of a split week on its own, both halves can fall under the limit and the overtime disappears.
- Pay the overtime in the period where the overtime hours were actually worked.
- Decide your week start, your limits and what counts toward them once, and write them down.
On this page7 sections
Weekly overtime is counted over a week. Pay periods mostly are not weeks. A monthly period ends on whatever day the last of the month happens to be, and a twice-monthly period ends on the 15th. So several times a year, a working week is cut in two by the end of a pay period, with a few days paid in one run and the rest in the next.
That is where a common and costly mistake comes from. If overtime is worked out on the hours inside each pay period only, a week that is over the limit as a whole can be under it in both halves. Nobody intends to underpay. The spreadsheet just never sees the full week.
The problem in one example
Emma Wilson works nine hours a day, Monday to Friday. Her weekly overtime limit is 40 hours, so she has worked 45 hours and is owed five hours of overtime. This month ends on the Wednesday.
- Period one holds Monday, Tuesday and Wednesday: 27 hours. Under 40, so no overtime.
- Period two holds Thursday and Friday: 18 hours. Under 40, so no overtime.
- Result: 45 hours paid at the normal rate. Five overtime hours have vanished.
Nothing in either pay run looks wrong. Both totals are plausible, and the mistake only shows if someone adds the two halves of the week back together. The person most likely to do that is Emma.
The right way: count the week, then place the hours
The fix has three steps, and the order matters.
- Count overtime on the whole week, ignoring pay periods. Emma's week is 45 hours against a limit of 40: five overtime hours.
- Find which hours were the overtime hours. Add up the week day by day. The hours worked after the running total passes the limit are the overtime.
- Pay each hour in the pay period its day falls in, at the rate it earned.
For Emma's week, the day-by-day count looks like this.
| Day | Hours worked | Week so far | Overtime that day |
|---|---|---|---|
| Monday | 9 | 9 | 0 |
| Tuesday | 9 | 18 | 0 |
| Wednesday (period ends) | 9 | 27 | 0 |
| Thursday | 9 | 36 | 0 |
| Friday | 9 | 45 | 5 |
- Day
- Monday
- Hours worked
- 9
- Week so far
- 9
- Overtime that day
- 0
- Day
- Tuesday
- Hours worked
- 9
- Week so far
- 18
- Overtime that day
- 0
- Day
- Wednesday (period ends)
- Hours worked
- 9
- Week so far
- 27
- Overtime that day
- 0
- Day
- Thursday
- Hours worked
- 9
- Week so far
- 36
- Overtime that day
- 0
- Day
- Friday
- Hours worked
- 9
- Week so far
- 45
- Overtime that day
- 5
The limit is passed on Friday, four hours into the shift. So the first pay period carries 27 hours at the normal rate. The second carries 13 hours at the normal rate and five at the overtime rate. The total is the same 45 hours, and all five overtime hours are paid.
When the overtime lands in the second period
With this method, overtime from a split week usually shows up in the later period, because overtime hours are the last ones worked. That surprises people the first time: a pay period with only two working days in it can contain overtime.
- Ben Carter works ten hours a day, Monday to Friday. Weekly limit: 40 hours.
- Monday to Thursday is 40 hours, all inside the first period, all at the normal rate.
- Friday's ten hours are all over the limit. They fall in the second period.
- Second period, for this week: one working day, ten hours, all overtime.
It is worth explaining this to whoever reads the payroll reports, because a payslip showing ten hours of overtime and no normal hours for a week looks like an error. It is correct. The normal hours of that week were paid in the previous run.
Does daily overtime have the same problem?
No. Daily overtime is counted within a single day, and a day always sits inside one pay period. If Emma's rule were “over eight hours a day”, she would earn one overtime hour on each of the five days, and each would be paid in the period that day belongs to. Nothing can be lost at the boundary.
If you use both a daily and a weekly limit, make sure hours are not counted twice. An hour that was already overtime because of the daily limit should not also push the weekly total over. Count daily overtime first, then apply the weekly limit to the remaining normal hours.
Things to decide once
Most disputes about split weeks come from rules that were never written down. Four decisions cover it.
- Which day the working week starts on. A week that runs Monday to Sunday splits differently from one that runs Sunday to Saturday, and the same hours can give a different overtime figure.
- Whether overtime is daily, weekly or both, and what the limits are.
- Whether paid time off and public holidays count toward the weekly limit. Contracts and local rules differ on this.
- Where split-week overtime is paid. The approach in this guide pays it in the period the overtime hours fall in. Some employers pay it in the period the week ends in. Either can work if it is applied the same way every time.
How ClockinBee handles it
ClockinBee works out weekly overtime on full weeks and attributes the overtime hours to the days they were worked. Each day's hours are then counted in the pay period the day falls in, so a week that crosses two periods keeps all of its overtime. Timesheets are still submitted and approved week by week, which means the full week is in front of the approver even when payroll will pay it in two parts.
The figures are estimates from the overtime rules you set. Set the limits and multipliers under Overtime rules, and the week start and pay period under Settings, to match your contracts.
Common questions
The first period has already been paid. What if the week turns out to have overtime?
With the method in this guide, nothing needs reopening. The hours in the first period were below the limit when they were worked, so they were correctly paid at the normal rate. The overtime hours come later in the week and are paid in the second period.
Should I move the hours so the whole week is paid in one period?
It is simpler to leave each day in the period it belongs to. Moving hours between periods makes totals disagree with timesheets and is hard to explain later. Count the overtime on the week and leave the days where they are.
Does this apply to salaried staff?
Only if they are entitled to overtime. If they are, the arithmetic is the same. Whether someone is entitled depends on their contract and the rules where they work.
Is weekly overtime always over 40 hours?
No. The limit depends on the country, the industry and the contract, and some places count overtime over two weeks or longer. This guide uses 40 only to keep the sums easy. Check the rules that apply to you.
How to do this in ClockinBee
- Set up overtime rulesDaily and weekly limits, and rates for overtime, Sundays and public holidays.
- Set your pay periodWeekly, every two weeks, every four weeks, twice a month or monthly.
- Give people different rulesHow ClockinBee decides which overtime rule, time off policy and holiday calendar applies to each person.
- Export hours and time off to payrollDownload approved hours, overtime and time off in the layout your payroll system imports.
Try it with your own team
1 month free with every feature, no card needed. $6 per user a month after that.
This guide is general information, not legal, tax or payroll advice. Working time, pay and time off rules differ by country and contract, so check the rules that apply to you.