---
title: Overtime Rules Setup
description: Set when regular hours become overtime or double time (daily, weekly, seventh day), with presets for several states, and who each rule applies to.
url: "https://theasst.com/docs/overtime-rules-setup/"
updated: "2026-10-14"
category: Setup / Company
---

# Overtime Rules Setup

An **overtime rule** says when regular hours become overtime or double time. Setup > Company > **Overtime Rules** lists your rules; each rule is a card you can edit.

## A rule's settings

- **Rule name** and **Active**.
- **Starting point** – pick Federal (FLSA), California, Alaska, Colorado, Nevada or No overtime to fill in the numbers below. These are only starting points; overtime law changes, so check your state's current rules and adjust.
- **Daily overtime after** – hours in a day after which the rest are overtime. 0 means no daily overtime.
- **Double time after** – hours in a day after which the rest are double time. 0 means none.
- **Weekly overtime after** – hours in a workweek after which the rest are overtime (40 for the federal rule).
- **Workweek starts** – the day your workweek begins.
- **Seventh day** – on the 7th consecutive day worked in a workweek, the first 8 hours are overtime and anything beyond is double time (as in California).
- **Paid as** – the [pay codes](/docs/pay-codes-setup/) used for overtime and double time. Left alone, the first Overtime and Double Time codes are used.
- **Company default** – use this rule for every employee who has no rule of their own or via a group. Only one rule can be the default.
- **Who it applies to** – check groups and/or individual employees.

![An overtime rule card: Federal Overtime (40 hours) set as the company default](https://theasst.com/wp-content/uploads/2026/10/overtime-rules-setup.webp)

## Which rule an employee gets

1. A rule assigned to the employee by name;
2. otherwise a rule assigned to one of their groups;
3. otherwise the company default rule;
4. otherwise no overtime.

Employees marked **Exempt from overtime** on their Payroll tab never get overtime.

## What counts

- Only *Regular* hours count toward the thresholds and convert. Leave, holiday, premium and other pay is never counted as time worked for overtime.
- Daily thresholds apply first; the weekly threshold then applies to the regular hours that remain, so no hour is counted twice.
- A workweek that straddles two pay periods is evaluated as a whole week, so a weekly threshold is not reset by a pay period boundary.
- If a day mixes work types, the overtime hours are taken from the last work type recorded that day.

## Seeing the result

Tick *Apply overtime rules* on the [Hours by Work Type](/docs/hours-by-work-type-report/) report to see regular and overtime hours. [Pay runs](/docs/pay-runs/) always apply the rules.