The payroll report looks at all the hours worked during each day and week for each team member. Overtime hours are accrued when the total hours worked during a day or week are over your organization's overtime limits. If you filter the payroll report you are filtering the timesheets that are used to calculate overtime.
Here is an example of a payroll report that is impacted by filtering:
The report below shows that I worked 7 hours from Monday to Saturday. This results in 2 hours of weekly overtime on Saturday since my organization's weekly overtime setting is set to 40 hours.
The report below is for the same date range, but it is not showing the hours I worked on Thursday. You can see there is a location filter set that is excluding my timesheet on Thursday. As a result, no overtime hours are accrued on Saturday.