What does "overtime" refer to in payroll accounting?

Overtime in payroll accounting specifically refers to the hours worked beyond the standard workweek, which is typically defined as 40 hours in many jurisdictions. When an employee exceeds this threshold, the additional hours are classified as overtime and are often compensated at a higher rate than regular hours, usually one and a half times the employee's regular hourly wage. This concept exists to encourage employers to manage workloads effectively while also ensuring fair compensation for employees who put in extra hours.

The other options do not correctly capture the definition of overtime. For example, hours worked during holidays may be compensated differently (e.g., holiday pay) but do not inherently fall under the definition of overtime unless they exceed the standard workweek hours. Meanwhile, hours that do not require pay and free hours given to employees do not represent any form of compensation for work performed, which is contrary to the essence of what overtime represents in payroll accounting.