Understanding Overtime
This chapter provides an overview of overtime and discusses how to:
Enter overtime.
Integrate overtime pay to the variable SDI base.
Tax overtime.
Run the overtime report.
View delivered overtime earnings.
Note. Before you can enter overtime, you must define the overtime calendar and overtime parameters for a pay group. Overtime setup is discussed in another chapter in this PeopleBook.
See Also
Understanding Overtime
In Mexico, employees are paid overtime for:
Regular overtime
Holidays worked
Days off worked
To define overtime:
Define the overtime calendar for your pay group on the Overtime Calendar page.
Define the overtime parameters for your pay group on the Overtime Parameters page.
This includes information such as the maximum overtime that is going to be paid double. For example, let's say that the maximum number of double hours of overtime per week is 9. If an employee works 12 hours of overtime in one week, then the first 9 hours will be calculated at a double rate, and the remaining 3 hours will be calculated at a triple rate.
Record overtime hours worked for employees either daily or weekly on the Enter Overtime MEX page.
When capturing the total number of overtime hours for a day, the system automatically splits the hours into double and triple rates, as defined by the maximum limits on double and triple hours, taking into consideration all the weekly and daily overtime parameters.
The system captures the total number of overtime hours for a week in the same way as for a day, but splits the hours for the week, instead of for the day. For example, if an employee works 12 hours of overtime in one week, then the first 9 hours will be calculated at a double rate, and the remaining 3 hours will be calculated at a triple rate. Only the weekly parameters are considered for weekly overtime.
Generate a report that details overtime for an employee on the Overtime MEX page.
You can specify to generate the report daily (with detail) or weekly (without detail).
Note. The Overtime Calendar page and the Overtime Parameters page are discussed in another chapter in this PeopleBook.
See Also
Entering Overtime
This section provides an overview of recording overtime and discusses how to:
Enter daily overtime
Enter weekly overtime
Recording OvertimeSome companies prefer to record overtime on a daily basis and other companies prefer to record it on a weekly basis. Depending on what your business process is, you can record overtime for your employees either daily or weekly. Each employee's overtime record is keyed by pay group, year, week, calendar ID, and the employee's ID and record number.
The formula for calculating overtime is the number of overtime hours worked times the hourly rate times 2 or 3 depending on the overtime parameters you've defined on the Overtime Parameters page.
The system automatically updates positive input records for the employee to synchronize with daily and weekly overtime entries. Also, when you make changes to previously entered overtime and save, the system updates the positive input accordingly.
Note. For each overtime record that you create for an employee, you must select whether to create daily or weekly overtime entries. If you save overtime details and later change between daily and weekly overtime for the employee's specific overtime record, the system deletes the previously saved data.
Page Used to Enter Overtime|
Page Name |
Definition Name |
Navigation |
Usage |
|
GPMX_OVR_DAILY |
Global Payroll & Absence Mgmt, Absence and Payroll Processing, Prepare Payroll, Enter Overtime MEX, Enter Overtime MEX |
Enter daily or weekly overtime for an employee. |
Entering Daily Overtime
Access the Enter Overtime MEX page (Global Payroll & Absence Mgmt, Absence and Payroll Processing, Prepare Payroll, Enter Overtime MEX, Enter Overtime MEX).
Data
|
Empl ID (employee ID) |
Enter the employee ID of the employee for whom the overtime is being recorded. |
|
Empl Rcd# (employee record number) |
Enter the employee record number of the employee for whom the overtime is being recorded. |
|
Only Weekly Overtime |
Select to enter weekly overtime only on this page. Deselect to enter daily overtime and have the system automatically calculate the weekly overtime values. Depending on your selection, the system displays on the page only the fields that are specific for entering daily or weekly overtime. |
Weekly Overtime
|
Double Hours, Double Hours Txbl (double hours taxable), Triple Hours, Holiday Hours, Exc Hours (excess hours), and Day Off Hours |
Based on the information that you enter in the Daily Overtime grid, the system automatically calculates the rates for these hours and displays the result to the right of the corresponding field. |
Daily Overtime – Hours Detail
|
Date |
Enter the date when the overtime occurred. |
|
Overtime Hours |
Enter the number of overtime hours the employee worked. |
|
Holiday Hours |
Enter the number of overtime hours the employee worked on a holiday. |
|
Day Off Hours |
Enter the number of overtime hours the employee worked on a scheduled day off. |
|
Override Hourly Rate |
Select for a specific overtime entry to override the hourly rate value for that overtime entry. The Hourly Rate field becomes available for edit. |
|
Hourly Rate |
The system displays the employee's hourly rate. If you selected to override the hourly rate for the overtime entry, enter the new hourly rate. Note. The system splits the double and triple overtime hours, based on the values you defined on the Overtime Parameters page. |
Daily Overtime – Job Code and Department Overrides
|
Business Unit and Description |
Enter the employee's business unit. |
|
Override Job Code |
Select for a specific overtime entry to override the job code value for that overtime entry. The Job Code field becomes available for edit. |
|
Job Code and Description |
The system displays the employee's job code. If you selected to override the job code for the overtime entry, enter the new job code. |
|
Override Department |
Select for a specific overtime entry to override the department value for that overtime entry. The Department field becomes available for edit. |
|
Department and Description |
The system displays the employee's department. If you selected to override the department for the overtime entry, enter the new department. |
Entering Weekly Overtime
Access the Enter Overtime MEX page (Global Payroll & Absence Mgmt, Absence and Payroll Processing, Prepare Payroll, Enter Overtime MEX, Enter Overtime MEX).
Data
|
Empl ID (employee ID) |
Enter the employee ID of the employee for whom the overtime is being recorded. |
|
Empl Rcd# (employee record number) |
Enter the employee record number of the employee for whom the overtime is being recorded. |
|
Only Weekly Overtime |
Select to enter weekly overtime only on this page. Deselect to enter daily overtime and have the system automatically calculate the weekly overtime values. Depending on your selection, the system displays on the page only the fields that are specific for entering daily or weekly overtime. |
|
Hourly Rate |
Enter the hourly rate for the weekly overtime. You'll use an hourly rate to calculate overtime. |
|
Business Unit |
Enter the employee's business unit. |
|
Job Code |
Enter the employee's job code. |
|
Department |
Enter the employee's department. |
Weekly Overtime
|
Double Hours |
Enter the total of overtime hours per week that are calculated at a double rate. Once you've entered the Double Hours Total, the system automatically calculates the overtime amount by multiplying the number of hours times the hourly rate for an employee times 2. The result displays to the right of the corresponding field. |
|
Enter the total of overtime hours per week that are calculated at a triple rate. Once you've entered the Triple Hours Total, the system automatically calculates the overtime amount by multiplying the number of hours times the hourly rate for an employee times 3. The result displays to the right of the field. |
|
|
In Excess Hours |
Enter the total in excess hours worked per week. Excess hours are those that are above the first 3 hours a day and on the first three days with overtime in a week, and are beyond the first 9 hours in a week. You can decide if these excess hours will be paid a double or triple rate on the Overtime Parameters page. The system automatically calculates the total overtime amount by multiplying the number of hours times the hourly rate for an employee and displays the result to the right of the field. |
|
Double Hours Taxable |
Enter the total of overtime hours per week that are calculated at a double rate and taxable. Once you've entered the Double Hours Taxable Total, the system automatically calculates the overtime amount by multiplying the number of hours times the hourly rate for an employee times 2. The result displays to the right of the corresponding field. |
|
Holiday Hours |
Enter the total amount of holiday hours worked per week. When you enter a holiday, the system checks the parameters defined in the Holiday Schedule to see if the date corresponds to a holiday. The system automatically calculates the overtime amount by multiplying the number of hours times the hourly rate for an employee times 2. The result displays to the right of the field. Note. Holiday Schedule parameters are defined on the Pay Group Name page. |
|
Day Off Hours |
Enter the total amount of hours worked on a scheduled day off per week. The system checks if the entered Day Off effectively corresponds to the parameters of the Day Off that were previously defined in the work schedule for each employee. The system automatically calculates the overtime amount by multiplying the number of hours times the hourly rate for an employee times 2. The result displays to the right of the field. |
Integrating Overtime Pay to the Variable SDI Base
For social security base purposes, overtime is divided into three categories:
Non-integrating overtime.
This is the total of overtime hours per week that are calculated as double. This overtime has a limit of no more than 3 hours a day and 3 times a week according to the parameters defined on the Overtime Parameters page.
Integrating overtime beyond three hours a day.
These hours are paid as double and will integrate 100 percent to the variable SDI base.
Integrating overtime beyond nine hours a week.
These hours are paid as triple and will integrate 100 percent to the variable SDI base.
The system calculates overtime in this way:
Determines all the number of hours that fall in each of these categories.
Calculates the amount per hour according to the daily salary.
Multiplies the rate per hour that results for the hours in each category.
Taxing Overtime
Part of overtime pay is taxable and part of it is non-taxable. This depends on the type of worker:
Minimum salary workers.
Above minimum salary workers.
For minimum salary workers, all double hours below three hours daily and up to three times a week is non-taxable. The remainder of overtime is taxed at 100 percent.
For above minimum salary workers, 50 percent of the overtime is non-taxable up to 5 times the minimum wage. This means that while 50 percent is not greater than 5 times the minimum wage for each overtime week, everything above this limit should be taxable.
Example of Non-Taxable Overtime for Minimum Salary Workers
Hourly rate = 5.65 MXN
Overtime hours worked in one week (9 hours double and 2 hours triple) = 11 hours
Double overtime hours earned = 9 hours x 5.65 = 50.85 x 2 (double) = 101.70 MXN (non-taxable)
Triple overtime hours earned = 2 hours x 5.65 = 11.30 x 3 (triple) =33.90 MXN (100 percent taxable)
Non-taxable overtime = 101.70 MXN
Taxable overtime = 33.90 MXN
Examples of Taxable and Non-Taxable Overtime for Above Minimum Salary Workers
Example 1:
Minimum wage = 45.24 MXN
5 times minimum wage = 226.20 MXN
Overtime in Week 1 = 150.00 MXN
Taxable overtime = 75.00 MXN
Non-taxable overtime = 75.00 MXN
Note. The non-taxable portion of overtime is 75.00 MXN, because 75.00 MXN is not greater than 5 times minimum wage (which would be 226.20 MXN).
Example 2:
Minimum wage = 45.24 MXN
5 times minimum wage = 226.20 MXN
Overtime in Week 2 = 550.00 MXN
Taxable overtime = 323.80 MXN
Non-taxable overtime = 226.20 MXN
Note. The non-taxable portion of overtime is 226.20 MXN, because 275.00 MXN (50 percent of the overtime) is greater than 5 times minimum wage (226.20 MXN). Therefore, the non-taxable portion of the overtime is capped at 5 times minimum wage.
Running the Overtime Report
This section discusses how to run the Overtime report.
Page Used to Run the Overtime Report|
Page Name |
Definition Name |
Navigation |
Usage |
|
GPMX_RC_OVR001 |
Global Payroll & Absence Mgmt, Absence and Payroll Processing, Reports, Overtime MEX, Overtime MEX |
Provides overtime details for employees. With this report, you have two options:
|
See Also
Global Payroll for Mexico Reports
Running the Overtime Report
Access the Overtime MEX page (Global Payroll & Absence Mgmt, Absence and Payroll Processing, Reports, Overtime MEX, Overtime MEX).
|
Pay Group |
Select the pay group for which the overtime report will be run. |
|
Year |
Enter the year for which the overtime report will be run. |
|
First Week and Last Week |
Enter the first week and last week parameters for the overtime report. |
|
Details |
Select if you want to have daily details in the overtime report. |
Viewing Delivered Overtime Earnings
Global Payroll for Mexico delivers these earnings to calculate overtime:
|
Earning |
Description |
|
D TRA DIA RE |
Daily Worked Day Off Ret |
|
DES TRAB DIA |
Daily Worked Day Off |
|
DES TRAB SEM |
Weekly Worked Day Off |
|
DESCAN TRAB |
Worked Day Off |
|
F TRA DIA RE |
Daily Worked Holiday Ret |
|
FES TRAB DIA |
Daily Worked Holiday |
|
FES TRAB SEM |
Weekly Worked Holiday |
|
FESTIVO TRAB |
Worked Holiday |
|
T EX D G D R |
Daily Double Overtime Tax Ret |
|
T EX D G DIA |
Daily Taxable Double Overtime |
|
T EX D G SEM |
Weekly Taxable Double Overtime |
|
T EX DOB D R |
Daily Double Overtime Ret |
|
T EX DOB DIA |
Daily Double Overtime |
|
T EX DOB SEM |
Weekly Double Overtime |
|
T EX EXE SEM |
Weekly Non Taxable Overtime |
|
T EX TRI D R |
Daily Triple Overtime Ret |
|
T EX TRI DIA |
Daily Triple Overtime |
|
T EX TRI SEM |
Weekly Triple Overtime |
|
T EXTRA D GR |
Taxable Double Overtime |
|
T EXTRA DOBL |
Double Overtime |
|
T EXTRA DT |
Double-Triple Overtime |
|
T EXTRA EXEN |
Non Taxable Overtime |
|
T EXTRA GRAV |
Taxable Overtime |
|
T EXTRA TRIP |
Triple Overtime |
|
TOT TMPO EXT |
Overtime Total |
All the earnings named SEM are elements you should use. These earnings are intended to serve as a bridge between the input pages for overtime and the positive input they generate. For example, if you enter 3 double overtime hours, it will be stored in the T EX DOB SEM earning as positive input, and later, it will be processed in the T EXTRA DOBL earning and other earnings (taxable and non-taxable).
TE FM EXENTO is a PeopleSoft-delivered formula. It calculates the taxable and non-taxable portion for all the overtime earnings (double, holiday, days off worked). This calculation is executed separately every week.
Note. The PeopleSoft system delivers a query that you can run to view the names of all delivered elements designed for Mexico. Instructions for running the query are provided in the PeopleSoft Enterprise Global Payroll 9.1 PeopleBook.
See Also
Understanding How to View Delivered Elements