Oracle Fast Formulas - Chapter 46 : Fast Formula for Overtime Pay Calculation

 

Chapter 46: Fast Formula for Overtime Pay Calculation

Permalink:
https://fusionkatta.blogspot.com/2025/04/fast-formula-overtime-pay-calculation.html

---

Overview:

This formula calculates overtime pay based on hours worked beyond regular hours and applies a defined overtime rate.

---

Business Logic:

• Standard work hours: 8 hours/day

• Overtime rate: 1.5 × Regular Hourly Rate

• Overtime Pay = Overtime Hours × Regular Hourly Rate × 1.5

---

Inputs Required:

• TOTAL_HOURS_WORKED: Total hours worked in a day

• REGULAR_HOURLY_RATE: Employee’s hourly rate

---

Sample Formula:

plsql
DEFAULT FOR TOTAL_HOURS_WORKED IS 0
DEFAULT FOR REGULAR_HOURLY_RATE IS 0

INPUTS ARE TOTAL_HOURS_WORKED, REGULAR_HOURLY_RATE

STANDARD_HOURS = 8

IF TOTAL_HOURS_WORKED > STANDARD_HOURS THEN
    OVERTIME_HOURS = TOTAL_HOURS_WORKED - STANDARD_HOURS
    OVERTIME_PAY = OVERTIME_HOURS * REGULAR_HOURLY_RATE * 1.5
ELSE
    OVERTIME_PAY = 0
ENDIF

RETURN OVERTIME_PAY

---

Use Case Example:

• Total Hours Worked: 10

• Regular Hourly Rate: ₹500
  → Overtime Pay: 2 × 500 × 1.5 = ₹1,500

---

Best Practices:

• Ensure TOTAL_HOURS_WORKED is collected accurately from time systems.

• This formula should be mapped to Overtime Payroll Elements.

---

Practice Quiz:

1. What if an employee works exactly 8 hours?

2. How do you adjust the formula for double overtime (2× rate)?

3. What happens if the hourly rate is missing?