Yes it can calculate overtime based on hours per day or hours per week. You need to setup Shifts and the overtime calculation setup is on the ""options"" tab in shift maintenance. to get to shift maintenance you need to have a value in the field ""work week beginning date"" found in time clock options.
That is the short answer, I've only set overtime up once and we did it based on weekly. if you have specific questions I may be able to help.