Skip to content
logo Knowledgebase

How to setup Alabama overtime exemption

Created on  | Last modified on 

Summary

You’ll set up an other pay in Sage BusinessWorks to track the exempt Alabama (AL) overtime pay. Alabama overtime pay is exempt from state taxes for hourly employees who work more than 40 hours a week.

Resolution

Before you begin:

  • Keep a manual spreadsheet of the employee OT exempt hours and OT exempt pay amount
  • If you’re using Payroll with Job Cost, Other pays entered on the time cards don’t post to Job Cost. This is because there are no task codes associated with other pays. You’ll post these into Job Cost manually

Setup Other Pay for Alabama SWT exempt overtime wages

  • Go to PR, Utilities, Maintain Other Pays and create an other pay called ALOTEXPT
    • Method: Variable, entered on time card
    • Category: Individual
    • Debit account: Consult with your CPA for suggestions
    • Taxable Status: Deselect SWT taxable and leave all other tax items selected 
      Image
    • Save the Other Pay

Add the Other Pay to the employee

  • Go to PR, Employees, Maintain Employees, select each employee that has exempt overtime and add the other pay
    • Select Other pays…
    • In the ID field, enter ALOTEXPT
    • Click Accept
    • Click OK
    • Click Save

Process payroll using the Other Pay for Alabama SWT exempt overtime wages

  1. PR, Processing, Time Card Entry.
    • Enter your time card using any regular pay, sick pay, vacation, regular overtime, deductions or other pays
    • To add exempt overtime, for earnings select the Other Pay: ALOTEXPT
    • Manually calculate the overtime hours worked x overtime rate to obtain the exempt OT total. Enter this amount for gross pay
      Keep a manual spreadsheet of the employee OT exempt hours and OT exempt pay amount
      • If you want to track exempt overtime hours on the time card/check stub:
        • In the Earnings drop-down, select an unused Overtime option
        • Enter the overtime hours and $0.00 for the Hourly rate
    • Save time card
  2. Process pay checks.
    • PR, Processing, Automatic Payroll Calculation
    • PR, Processing, Print Payroll check
  3. For all checks that require OT Exempt pay you’ll use the new Other Pay. Then manually track the hours and wages in a spreadsheet.

Alabama OT Exempt Reporting
If you need a report for the SWT exempt overtime go to Payroll, Reports, Other Pay Reports. Then select Period Activity, Other Pay Activity Summary by Employee ID.

Need more help?

Chat now