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Thread: Overtime Calculation

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    Overtime Calculation

    Does anyone personally handle their payroll?

    We had a professional payroll company handle our payroll, I have just taken back the responsibility (but not my computer software!)

    Trying to calculate the formula for working out the rate:

    Our company has been of the opinion that the Govt. would ultimately enforce a medical aid for all employees, but not wanting to have the medical shortfall being deducted from the company's bank account, we decided that we would give a medical aid allowance, employees are requested to arrange their own medical aids, but most don't and just use the allowance as "cash"!

    The calculation as per the payroll companys past payslips, calculates the payment on the "basic" salary only at the standard rate of 1.5 (No public holidays etc. worked!)

    I was told that if I take the total package of the basic plus the medical aid allowance that there can be a "reasonable" expectation by the employee that the amount is treated as their "Salary", and should the medical aid become compulsory that our company could still be "required" to provide an additional sum for the medical.

    So two questions really - do you think if medical and a retirement fund become compulsory that companies could be made to bear the cost?

    Is overtime calculated on basic in pay package only?

    Thanks, would appreciate any advice

    Yvonne

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    Anyone able to give any advice?

    Yvonne

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    Quote Originally Posted by Yvonne View Post
    Is overtime calculated on basic in pay package only?
    Basically, yes. The best way I can think of to expain is you need to seperate basic pay and benefits. Technically, the benefits are proportionate to basic pay. The basic pay is the foundation.
    do you think if medical and a retirement fund become compulsory that companies could be made to bear the cost?
    Probably - either directly or indirectly. But there is still that if. Even if it is a question of when, it might still be quite a way off. I also don't buy that there is any advantage in jumping the government gun by setting up the company's own fund. Maybe it's just the cynic in me but I reckon all the newish rules have killed the main reason why a company should put in a pension fund (in particular). Staff loyalty, in case you're wondering.

    I lost you on the public holidays iro overtime thing, but let me waffle on anyway to encourage correction of my erroneous ways.

    My undertanding is that there are 365 days in the year and 12 months. If you've got a 5 day work week this averages out at 365/12*5/7 = (approx.)21.7 average working days per month. So the monthly salary is divided by 21.7 to get the daily rate used for overtime calculations.

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    Sorry - I meant our company never works on public holidays.

    Thanks for the help.

    Yvonne

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