Configure additional hours worked beyond the scheduled or contracted amount with flexible rules and multipliers. Use this feature to ensure compliance with labor regulations and simplify compensation management.
How to Use
- In your sidebar, go to Settings → Time → Time Tracking Policy Settings
- Under Work Time Categories, open Extra-Hour calculation
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Define the baseline for extra hours. Choose between:
- Planned Hours: compares actual time worked to scheduled hours
- Agreement Hours: compares actual time to contracted hours
- Hours beyond the selected baseline will be treated as extra hours
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Understand the Base Rule
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Initially, a Base Rule applies where:
- All extra hours are counted beyond the baseline
- Default hourly rate is 1:1
- Compensation goes to the Bank of Hours (or Time Off, if selected)
- Example: If employees work 13 extra hours in January, and Time Off is selected, 13 hours are banked as time off.
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Initially, a Base Rule applies where:

Create Custom Extra-Hour Rules
- In the work time categories tab, scroll down and click New Extra‑Hour Rule
- Enter a name for your rule
- Select Fixed Range or Unlimited (e.g., 1st–2nd extra hour)
- Define the multiplier (e.g., 1 extra hour = 2 compensated hours)
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Choose the compensation method:
- Time off
- Payroll
- Bank of hours
- Click Save

Configuring Extra Time Compensation
Compensation settings
The balance configuration determines when the platform resets the planned hours versus worked hours in time tracking. This reset only affects the time tracking balance and does not directly impact the time off counter. Set the conditions for the compensation methods: Select when to apply extra hour rules, including the hourly rate and compensation method.

Negative balance settlement
If the balance is negative at the end of the time off update cycle, the accumulated hours on the counter will be used to compensate for the negative balance. The time-off counter may go negative if there aren’t enough accumulated hours to cover the negative balance.
If this option is disabled, no negative balance will be transferred to time off. If enabled, negative transfers to time off will be unlimited.

Understanding the Key Counters in Time Tracking
To better manage extra time compensation, it’s important to understand the different counters visible in the time tracking section:
- Worked Hours: Shows the total hours worked in the current month. Estimated hours are based on the time planning tool.
- Planned hours: refer to the number of work hours that have been scheduled in advance.
- Total for Compensation: Indicates the total hours that have been compensated through time off.

When an extra-time (overtime) request in Factorial is approved, the hours are immediately deducted from the “compensation absence” counter—regardless of the employee’s monthly hours balance.