What is overtime averaging?

When overtime is averaged, it means worked hours are averaged over a defined period.

The most common example is the total ordinary hours an employee works will be averaged over a number of set weeks with any hours in excess of this total being paid at overtime rates.

For example, a rule which applies overtime after 38 hours per week, when averaged over 4 weeks, will calculate overtime after 152 hours have been worked in the 4 week period.

You can apply overtime averaging rules to all staff, to staff classified by a specific award template, or to individual employees.

Set the organisation-wide default overtime averaging period

Tanda bases all overtime period award rules on the number of weeks defined in your organisation default overtime averaging period settings under

Settings > All Settings > Timesheets > Show Advanced Settings > Overtime averaging period (weeks).

Example

If you entered the Overtime averaging period (weeks) as 1, any overtime award rule based on overtime period would be based on the number of hours worked in a period of 1 week as shown below:

However, if your organisation default overtime averaging settings were set to '2 weeks' the above rule would need to be entered as '76 hours', as the period would now be defined as 2 weeks.

Tip: If you have multiple overtime averaging arrangements, it can be easiest to leave your organisation-wide overtime averaging period setting as 1 week and apply your overtime averaging arrangements to staff under a managed template, or to individual staff.

Set the overtime averaging period for employees under a managed template

To apply overtime averaging settings to all employees under a specific Tanda modern award template, follow the below steps:

Navigate to the Compliance page
Click Manage next to the relevant template
Select Edit under Maximum Shift Length
Click the Period of Ordinary Hours tab
Enter a value in the Overtime averaging period (weeks) field
Adjust the Period start date to change when the averaging settings first start applying
Click Save

Set the overtime averaging period for an individual employee

To assign an overtime averaging arrangement to a specific employee, follow the below steps:

Ensure Advanced Payroll Fields is enabled under Settings > Feature Management
Navigate to Workforce > Staff
Open the profile of the relevant staff member
Click the Payroll tab in their profile
Enter a value in the Overtime averaging period (weeks) field
Adjust the Period start date to change when the averaging settings first start applying
Save the changes with the Update Employee Details button

FAQs

Can I use a combination of account wide averaging and individual overtime averaging settings?

You can use a combination of averaging settings within an account. The organisation wide settings will apply to new employees by default until either an award template is applied to the employee containing a different overtime averaging period, or the individual overtime settings of the employee are modified.

Individual overtime settings override those contained in the award template and organisation settings.

For example, if you have entered an overtime averaging setting on an employee profile, then modify the overtime averaging setting of the award template that applies to the employee, the employees averaging setting will remain as it is set on the employee profile as individual settings take priority over those contained in the award template.

How is Monthly Overtime Averaging calculated?

The calculation for Monthly Overtime Averaging varies depending on the length of each calendar month.

The calculation period runs from the start date of the overtime averaging period until the day prior to the same date on the following month. For example,

If the start date was the 1st, the averaging period will run from the 1st until, and including the last day of each calendar month.

If the start date was the 10th, the averaging period will run from the 10th of the month until, and including the 9th of the following month.

The calculation basis of the number of hours in the averaging period is as follows:

Example: John is contracted to work 38 hours per pay period (one week). There are 31 days in the calendar month of May, and 52 weekly pay periods in one year. Therefore, his monthly contracted hours for May are 167.83.