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Overtime Formula - Factories Act

Hr. Khaiser Ali Shah Started The Discussion:

Dear Friends,

Can you please guide me in how to calculate normal overtime hour factor. What I know is

Basic salary X 12Months / 365Days = 1 day avg Basic Salary

1 day avg basic salary / 8hrs = 1 hr avg basic salary

1 hr avg basic salary X 1.5Factor = 1 hr normal overtime cost.


Please tell me if this is the actual true formula if not please guide me for the best one.

Thanks & Regards,
Khaiser Ali Shah
00966509928983

Hr. Khaiser Ali Shah - Contributing Member
Come on guys no replies, please reply or send some suggestions. Just try to give me the way you calculate the payroll for your company.

aparna_ios - Contributing Member
Dear Mr Shah,

As per my opinion you can calculate the overtime amt by fixing a certain amt for per hour of extra work & multiply the amt with no. hours of extra work performed which would ultimately give you the Overtime amt earned by an employee. For ex XYZ works for 5hrs extra & let us suppose that we have fixed an amt of 100 rupees per hour for the overtime work so the amt that XYZ would be eligible would be 100*5 = 500Rs.

Regards
Aparna
HR Professional

lizancy - Contributing Member
Overtime calculation

Per day salary Basic salary = (pertaining to the no of days in a month)
= Basic/31 = Salary per day

Per day basic / 8 = per hour salary

Overtime = 1.25*per hour salary*no.of overtime hours worked.

Liz

Hr. Khaiser Ali Shah - Contributing Member
Thanks for reply Liza, I am looking for further suggestions so, come on friends give me the method of your overtime calculation. Once againg thanks to Liza, Khaiser

NKTiwari - Contributing Member
Overtime calculation varies from country to country depending on the factories act. In India overtime is given as double the normal rate(Basic+DA) for the extra durt hours. If it is 31 days duty then one hour rate is found as A/31/8 and if it is 26 days work then one hour rate is found as A/26/8 and so on.

Hr. Khaiser Ali Shah - Contributing Member
Dear Murali, That’s OK but it differs from company to company so please send me the one your company follows. Regards

vasu_hr - Contributing Member
hi all

Mr.Tiwari is right OT should be paid double the wages ;
when calculating hourly wage we should not take 9,10 hours we should only take 8 hours because in Factories act it has been stated that working hours should be 8 hours including all intervals.

And importantly we should not allow an employee to work overtime above 48 hours in 3 months

hi,
one company provide to their employee double overtime on the base of gross salary.why they are taking gross for ot calculation.like
Gross salary-5000
working hours-2
month-may
=5000/31
=161 one day wage
=161/8
=20 per hour
=80 rupees ot

HR_HYD - Contributing Member
Dear Khaiser, The calculation you have stated s true,but plz look in to the actual(1.25 or 1.5) placed in saudi market Regards HR_HYD



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