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Create an Overtime Custom Payroll Item and Add It to the Overtime Multi-rates Table

This article explains how to create a custom payroll item with a specific multiplier. The custom OT item can then be added to the OT multi-rates table to make it easier for admins and payroll managers to enter OT hours paid out with specific multipliers.

Currently, the system default Overtime items available are:

  • Hourly rates X 0.5, 1, 1.5, 2, 2.5, 3

  • Normal day, rest day, public holiday rate (according to Employment Act)

  • Custom amount

If you pay Overtime for your employees with a different multiplier, for example, hourly rate x 4, you will need to create a custom OT payroll item. You can add the custom OT multiplier to the multi-rates table in payroll to make it easier to enter your OT hours for payroll processing. 

Audience & Scope

Audience: HR Admin & Payroll Manager

Module: Payroll

Country: Malaysia

Pre-requisites: HR Module Permission for Payroll Module & Module Settings

 

Step-by-Step Instructions

PART 1: ADD NEW CUSTOM PAYROLL ITEM

1. Go to HR Lounge > Payroll > Settings > Payroll Items

2. Click the '+ Create custom item' button

3. Choose item type 'Addition' 

4. Enter the item name, e.g.: Overtime (rate x 4)

5. Choose 'Remuneration' for Category

6. Select the appropriate 'Addition type' for the OT

7. For 'Overtime (OT)?', choose Yes

8. Choose 'OT based on Hours' and add your custom multiplier, e.g.: 4.0x

9. Keep BIK as 'No'

10. Choose which statutory contributions apply for this payroll item (PCB, EPF, SOCSO, EIS, HRDF)

11. Choose the EA form field (usually B.1 (a)) and the CP22A form field

12. Click 'Save'

PART 2: ADD CUSTOM OVERTIME RATE IN MULTIRATES TABLE

1. Run payroll for any cycle

2. In the Adjust Payroll Stage, click the Overtime button to open the Overtime Multi Rates table

3. Click 'Set table columns'

4. Click 'Change column selection'

5. Tick the new Overtime item you just created, then click 'Selection done'.

6. You can reorganize the placement of the OT items in the table by dragging the 3-line icon next to the item name

7. Click 'Save'

8. You should see the new OT pay item included in the table.

 

Common Issues/FAQ

Q1: How is the hourly rate calculated?

A1: It depends on your Payroll Center General Settings > Calculation setup, or if employees have an Overtime flat rate setup. For the rate on normal days, rest days, and public holidays, refer to the calculation here. 

 

Related Articles

Payroll Malaysia: Complete Guide to Setting Up Company Payroll Information

Ownership

By: Aqilah