This setup is used to calculate an allowance based on overtime hours, where a fixed threshold and hourly rate are applied using a system formula.

Steps to Convert Overtime Hour to Allowance Using Fixed Hourly Rate:

1. Go to Tools > Payroll Items.

2. Go to Allowance.

3. Click + Add New.

4. Enter the Code and Description of the item.

5. Enter the Formula as below: 

IF (OT for Worked Days > 104) (OT for Worked Days – 104) * 5 ELSE 0

• The threshold limit of overtime hours is 104 hours. Only overtime hours above 104 hours will be considered. Each eligible overtime hour is paid at RM 5 per hour.

  • If OT ≤ 104 → Allowance = 0

  • If OT > 104 → Allowance = (Excess OT Hours) × 5

6. Click Save.