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The real challenge while processing payroll is calculating overtime component for different types of employees. However, it is inevitable. And, defaulting overtime payments are not only costly but also affects the company’s image. 

That’s exactly what happened to McDonald’s, California. The famous fast-food chain has to pay $26 million to resolve claims that they skimmed wages from some 38,000 workers at corporate-run stores across California.

Unsurprisingly, this is only one of the many cases that have been registered in 2019. The million-dollar question is what are the major root causes for overtime miscalculations?

The major root causes of overtime miscalculations are: 

  1. Ineffective Time Tracking 
  2. Outdated Payroll System 

Ineffective time tracking 

The average working hours in a week around the world is 40 – 44 hours. However, with technology creeping up our personal space, employees are constantly working on their laptops or mobile phones. Thus, employees establish that they are working overtime. 

And, not to mention, many organizations still use outdated technologies to track time. This leads to the employees tampering their actual work hours. This leads to incorrect overtime hours. As a result, overtime is miscalculated and increases payroll errors. 

How to track your employees’ time effectively? 

Using a time tracking software to monitor your employees’ time will simplify this process. Hence, HuskyHR’s Attendance Bot tracks as soon as employees clock-in and clock-out. 

And, timesheets are automatically updated and generated on the employee app and the admin panel.

Additionally, you can set a limit to the work hours of your employee’s time. The best part about doing so is that your employees will know how much time is left in their workweek. 

As a result, you will not only be able to plan your payroll expenses but also calculate overtime accurately. 

Outdated Payroll Software 

Every HR manager knows the importance of payroll software. And, there are constantly working to ensure they are payroll compliant.  

However, according to IRS statistics, over 33 percent of employers make payroll errors and approximately 40 percent of small businesses incur penalties averaging $845 a year. 


This is because 83 percent of businesses use outdated payroll software. 

How can you avoid overtime miscalculations? 

Streamlining payroll software with a time tracking feature will do the trick.  According to a study by the American Payroll Association, companies that integrate time tracking features with payroll software are 44% less likely to commit errors. 

Salary Slip Based on Timesheet

Using HuskyHR’s payroll software, you can simply enable the option to generate payslips according to the timesheet. 

And, the next time you process payroll, HuskyHR will automatically calculate the overtime hours and update the salary accordingly.

To summarize

The number of working hours has drastically increased over the last few years. And, it is crucial for your company to plan your monthly payroll expenses ahead. 

Integrating time tracking software along with payroll is a job half done. And, it definitely is a good one.  

Start your 30-day trial period today to make your HR smile every day. 


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