Most payroll corrections come from the same few causes. Fixing them upstream is faster than fixing them on Friday.
If payroll processes on Wednesday for a week that ended Sunday, the real deadline for time approval is Tuesday noon. Working backwards gives you a timetable the team can follow: employees fix punches Monday, managers approve Tuesday morning, payroll reviews exceptions Tuesday afternoon and locks time. Anything after the lock goes to the next period as an adjustment.
To total hours with breaks and overtime, use our time card calculator.
Overtime is calculated on the workweek. If your pay period is biweekly, overtime still applies to each individual week, not to the 80 hours total. A person who works 50 hours in week one and 30 in week two is owed 10 overtime hours even though the period total is 80. Bonuses and shift differentials raise the regular rate, which raises the overtime premium. Here is an example with made up numbers.
| Item | Value |
|---|---|
| Hours worked | 44 |
| Base rate | $20.00 |
| Night differential | $2.00 for 12 hours |
| Straight-time earnings | $904.00 |
| Regular rate | $20.55 |
| Overtime premium for 4 hours at half rate | $41.09 |
Mistakes still happen. The cleanest process is a correction request that records the date, the reason and the approver, and is paid in the next run. Off-cycle checks should be rare. When a correction reduces pay, check your state’s rules about recovering overpayments, since some limit or forbid deductions without consent.
After each run, compare gross wages in payroll to labor cost in accounting. A difference usually points to a missing accrual, a mapped account or a tax setup issue. A monthly check is easier than a year-end search.
The weeks around the new year bring the most corrections: bonuses, accrued vacation payouts, minimum wage changes in many states on January 1 and updated tax tables. Review state and city minimum wage changes in December, update pay rates before the first payroll of the year and test with one employee at each rate. Keep a copy of the final payroll register for each year in one place.
A payroll administrator works between two agencies. The U.S. Department of Labor sets the rules for hours, overtime and records under the Fair Labor Standards Act. The Internal Revenue Service sets the rules for withholding, deposits and annual forms. States add pay frequency, final pay and deduction rules on top.
| Rule | Agency | What it means for payroll |
|---|---|---|
| Workweek overtime | U.S. Department of Labor | Overtime is figured per fixed workweek, never averaged across a pay period |
| Regular rate, 29 CFR 778 | U.S. Department of Labor | Non-discretionary bonuses and differentials raise the overtime rate |
| Rounding, 29 CFR 785.48 | U.S. Department of Labor | Allowed only if it averages out and does not shortchange employees over time |
| Supplemental wage withholding | Internal Revenue Service | A flat 22% federal rate may be used for bonuses up to $1 million |
| Form W-2 deadline | Internal Revenue Service and Social Security Administration | Due to employees and filed by January 31 |
The numbers are fictional. An employee earns $18.00 an hour and gets a $390 production bonus for a 13-week quarter, promised in advance, so it is non-discretionary. During the quarter, the employee worked 45 hours in four of the weeks. The bonus spread over 13 weeks adds $30 to each week’s earnings.
| Item | Value |
|---|---|
| Bonus per week | $390 ÷ 13 = $30.00 |
| Added to regular rate in a 45-hour week | $30.00 ÷ 45 = $0.67 |
| Extra half-time per overtime hour | $0.33 |
| Extra owed per 45-hour week | 5 × $0.33 = $1.67 |
| Extra owed for the quarter | 4 weeks × $1.67 = $6.67 |
Small, but easy to miss across a large workforce. Our regular rate calculator and bonus proration calculator handle the math.
Most payroll surprises trace back to one of these five. Ask them in this order and you will usually find the answer before you need to call the manager.
EZTime gives payroll administrators payroll-ready reports that export to Excel or PDF, missed punch requests with manager approval and an audit trail, and alerts for forgotten clock-outs before the lock. Monthly attendance reports can be signed digitally by employees, which helps when a payslip is questioned. PTO balances and time off requests sit in the same account. EZTime does not process payroll itself, so the export goes to your payroll provider.
Rounding is allowed in some forms if it is neutral over time. Many employers avoid it and pay to the minute.
The employee proposes the time and the manager approves it, with the reason saved.
Allocate wages by the work date for accounting, even though they are paid in one check.
A bonus that is truly discretionary, where the employer decides both whether to pay and how much at the end of the period with no prior promise, is generally excluded. Bonuses promised for attendance, production or quality are included.
Federal rules require time cards for at least two years and payroll records for three. Many states require longer, so use the longest period that applies.
Weekly overtime math
Convert pay between formats
Add up shifts and breaks
Book a demo and we will show an approval deadline and lock built around your payroll date.
This page is general information, not legal, payroll or tax advice. Rules differ by state, city and contract, and they change. Check with a qualified professional before you act. Numbers in examples are made up.