Overtime Bill Factors can be tricky.  Unlike payroll (where federal, state and even location regulations dictate the calculations), billing is determined based on the agreement between the Labor Buyer and Labor Supplier.  


The first and most critical step is to determine what your agreement states with your customer.  If overtime (OT) is billable, which of the following is the billing based on?

  • Is it based on an increase in the Bill Rate?
  • Is it based on a flat OT Bill Rate? 
  • Or, is it based on a markup over Pay Rate?  
Because the OT Bill Factor is a multiplier, you will want to make sure you are clear on exactly how OT for billing should be calculated.  Several examples are provided below.  If you still have questions, please contact WorkRecords Support for assistance.  


It is important that you do not present TimeCards on Invoices until you are sure that the OT Bill Factor is correct.  Otherwise, your only option may be to create a Credit/Charge Adjustment to correct a billing mistake.        



INCREASE OVER BILL RATE

If your OT Bill Rate is an increase over the Bill Rate, you will confirm or input that increase in the box noted Bill Factor on the Template/Order Confirmation.  If this is the same rate for all positions at a customer, it will be configured in the Supplier's account and no changes will be needed unless something different is negotiated between the buyer and the supplier. 



           



FLAT RATE

If you have a set OT Bill Rate for your customer, you will need to manually determine the OT Bill factor by dividing Regular Bill Rate into the OT Bill Rate.  


Example 1

Bill Rate - $10.00 

OT Bill Rate - $15.00 

$15.00/$10.00 = 1.5 


Example 2

Bill Rate - $12.00  

OT Bill Rate - $16.72  

$16.72 / $12.00 = 1.3933  (always go out to the 4th decimal place and round up or down to get to the correct rate)

In this example, the OT Bill Factor is calculated to be 1.3933.



         



MARK-UP OVER PAYROLL

If your Bill Rate is based on a mark-up over payroll, you will need to:

  • First, determine the OT Pay Rate.
  • Calculate the OT Bill Rate based on the mark-up.  
  • Then, once you have this number, you need to divide the OT Bill Rate by the Regular Bill Rate to get your OT Bill Factor.  Remember, you will want to take it out to 4 decimal places
  • Be sure to recheck your calculations to make sure that multiplying the Bill Rate by the OT Bill Factor you just calculated gives you the correct rate.  


Example

Overtime billing is based on 38% mark-up over Payroll

Pay Rate - $9.40 

Bill Rate - $12.97 


First, calculate the OT Pay Rate.  Multiply the Pay Rate by the OT Rate for payroll (usually 1.5).

$9.40 * 1.5 = $14.10 OT Pay Rate 

 

Next, calculate the OT Bill Rate.  Multiply the OT Pay Rate that you just calculated by the mark-up (1.38 in this example).

$14.10 * 1.38 = $19.46 OT Bill Rate  


Finally, divide the OT Bill Rate that you calculated by the regular Bill Rate.

$19.46 / $12.97 = 1.5004 (always go out to the 4th decimal place and round up or down to get to the correct rate)


In this example, the OT Bill Factor based on a 38% mark-up over payroll is 1.5004.


An Excel worksheet is attached to help you make the calculations.


Because different positions may call for a different OT Bill Factor to generate the correct rate, you can input the correct OT Bill Factor into each order template or can even update a single order.  If you have any questions, please reach out to the WorkRecords Support team for assistance.  


         


It is important that you do not present TimeCards on Invoices until you are sure that the OT Bill Factor is correct.  Otherwise, your only option may be to create a Credit/Charge Adjustment to correct a billing mistake.