Day.io lets you create specific overtime rules for each group of employees.
In the Paid Overtime tab of the Pay Policies module, you select which days are counted as overtime, define compensation percentages, daily limits and notifications.
These settings are essential to comply with labour laws and avoid unexpected costs.
Advanced options – such as calculating overtime in a rigid schedule model, including breaks in the calculation and setting a threshold for unplanned days – allow you to adapt the rule to your company’s work schedule.
Access the pay policy
From the side menu, click Pay Policies and open an existing policy or click + New Policy to create a new one.
Enter a name and click Create.
Open the overtime tab
Select the Paid Overtime tab.
To configure only overtime, keep the Activate Banked Hours toggle off.
Choose the calculation model
Consider only early arrivals and late leaves as overtime regardless the total worked hours: enable this option if your company uses a fixed schedule. It calculates the difference between planned and actual times and shows Debit columns in Super Punch.
Include breaks in calculation: check if breaks (lunch, rest) should count towards overtime when the above setting is enabled. Uncheck to exclude them.
- On non-planned days, start calculating overtime after X hours: define how many hours must be worked on unplanned days before counting as overtime (e.g., after 8 hours).
Configure compensation phases
Click New row to create new phases phase. For each phase set:
Days: choose the days of the week (e.g., Monday to Saturday, or Sundays & holidays). Days cannot overlap.
Pay rates: define how much extra will be paid (e.g., 50% or 100%).
Phase name: change the name to improve report clarity.
Limit (optional): set a daily limit of hours; excess hours are assigned to the next phase.
Repeat for as many phases as necessary.
Specify whether the phase applies to daytime or nighttime if night bonus is active (click the Sun/Moon icon next to the day).
Set limit alerts
Activate the Limit alert option and specify a maximum number of overtime hours per day, week or month.
When employees reach the limit, managers receive a notification. The system does not block extra hours; it just notifies.
Save and finish
Click Save at the bottom of the page.
After saving, configure other tabs (Night Shift, Tolerance and On Call) and only then add employees to the policy.
Important: once employees are added, the overtime settings cannot be edited.
Observations
Activate Banked Hours: to combine banked hours and overtime, turn on the toggle and configure bank rules.
Split by calendar day or full shift day: choose whether the phases should respect the planned shift day or whether the days are divided after moving on to another calendar day (in cases of shifts ending after 00:00).
Tips or troubleshooting
Review compensation rules before adding employees; no changes are allowed afterwards.
Ensure phases do not overlap and percentages comply with labour agreements.
Best practices
Separate phases by type of day (weekdays, weekends, holidays) for easier monitoring.
Use concise, descriptive names (e.g., Weekdays 50%, Sunday 100%).
Configure alerts to avoid excessive overtime and ensure compliance.
Frequently asked questions
Can I activate overtime and banked hours in the same policy?
Yes. Keep the Activate Banked Hours toggle on and configure bank rules in the same tab.What does the rigid schedule model do?
It applies overtime calculation based on the planned schedule and highlights deductions/ additions in Super Punch.Can I edit phases after adding employees?
No. All changes must be done before adding people to the policy.What happens if I set a limit in a phase?
Hours within the limit are paid according to that phase; excess hours move automatically to the next phase.
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