rains13 Started The Discussion:
Hi All,

I have a query related to overtime by our workers. We are a small manufacturing company and have overtime almost on daily basis in which some workers work for few hours extra everyday.

I understand that the labour law indicates that overtime should be paid at double the normal rate. I am not clear what normal rate is. Whether it is only basic salary, or includes convenyance allowance and HRA as well? We do not have any DA for our workers.

Can someone please give refernce to the relvant law and tell me how to calculate overtime in our our case?

Thanks for your in advance and I look forward to your reply,

Posted 19th March 2008 From ,
hi As per our company policy OT has to be pay on total salary .. the formula is as under. OT = Basic+DA+HR+LTA+MED+Conv / 8 Hrs X No. of hrs OT done. Hope this will help u... Best regards Sunil Malla
Posted 25th March 2008 From India, Mumbai
Please ignore my earlier comment..


As per our company policy OT has to be pay on total salary .. the formula is as under.

OT = Monthly Salary / 30 Days / 8 Hrs X No. of hrs OT done.
Hope this will help u...

Best regards

Sunil Malla
Posted 25th March 2008 From India, Mumbai
Hi. In our company we are calculate OT rate as below OT Rate = Basic + DA + HRA = Total = Total / 26/8*2 Regards Vrusha
Posted 25th March 2008 From India, Chakan
i am working in a manufacturing company as per our rules and regulation the ot calculate is BASI+DA+HRA+CON.ALL . IF IT IS BELOW 4 HOURS THEN HALF THEIR ORDINARY RATE OF WAGES.IF IT IS ABOVE 4 HOURS THEN IT IS 1 DAY RATE OF WAGES.
Posted 25th March 2008 From India, New Delhi
Thanks for all your replies.

I have a further question- in our company the OT is very high and if OT to be paid at double the normal rate- considering basic, HRA and con. all. as normal rate, then it would be a lot of money.

Can we have a special allowance kind of thing for our workers to reduce their normal rate? In such case, can OT be paid only on the remaining normal rate without including that special allowance?

Example- Normal rate is X. Special Allowance is Y, so now the normal rate becomes X-Y. Can OT is paid at double the rate of X-Y without paying anything on Y?

Your earliest response will be highly appreicated.

Posted 27th March 2008 From ,
Hi rains,

If you think that your company the ot rate is very high then you stop the ot and make internal policy as :-

1) Ot closed obove 12000/-
2) above 12000/- pay incentive, as 2hrs = 25Rs 5or6 hr = 100/- this type other wise
3) I saw in many export house they do not pay ot at double rate. As per legal requirment ot will not be excess 48 hours in Quarter. Every person show 16 hrs on actual salry sheet and pay double rate of wages and balance ot pay single rate of wages.

Daily wages Ot Calculation formula = Gross salary/08x no. of hrs if double x2

Monthly salry Gross salry /208xno. of hrs if double x2


Posted 24th August 2009 From India, Gurgaon

OT to be paid double the salary.

for OT salary = Basic + DA only not any other allowences that are paid to the employee.

calculation : Basic + DA /26 days = per day wage
Per day wage /8 Hrs = Per Hr Wage
Per Hr wage X No of OT Hrs X 2 times = OT wage.
OT not to be given as you like, after all you are dealing with human being, rest is must after every 8 Hrs of work. More over the energy levels in employee depreciates for every Hr. what can you expect from the employee to work after completion of 8 Hrs of work. He or she can not give you complete work as he give in the first few Hrs of duty.

In a week an employee worked for No. of Hrs, more than 48 Hrs, OT to be given for the extra Hrs which are over and above 48 Hrs, as per the factories act.

If the OT is a regular and must, you better go for a new recrutement and get full pledged work as you desire at a single day salary / wage, and you can save money by not paying double the salary by way of OT payments.

Mohan Rao
Manager HR
Posted 24th August 2009 From India, Visakhapatnam
Hi, Download a free overtime calculator from the website below: (Payroll Software, Attendance Software, HRM Software, Indian Payroll Software) at http://www.lenvica.in Warm Regards, Biju
Posted 29th October 2009 From India, Bangalore
hi, OT calculation is very simple 1.Gross Salary * OT hrs /104 (for double rate) 2.Gross Salary*OT hrs /208 (for single rate) Rajesh Tripathi LDK Pantnagar
Posted 14th November 2009 From India, Kashipur
Dear Brijesh,

m working in Adani Group as HR Exec, plz clear out the OT calculation process to me...wanna have ur cell no.

as according to me OT should be given on Basic+D.A not on any other variants of pay structure.

Posted 21st February 2010 From India, Kota
HI all,

I am working in Hotel Industry.I have Same problem abt the Over time pay for Hotel employee.can any One suggest me How To calculate over time for Hotel Industry?

plz do the needful,


Posted 21st February 2010 From India, Mumbai
Sir Overtime wages is calculated only for PF wages ( basic + DA +Personal Pay + Prodty allow such concern) ksv
Posted 22nd February 2010 From India, Madras
Posted 7th November 2012 From India, Delhi
plz dont misguide if you are unaware of some thing OT is paid on basic wages i.e Basic + Da only and not on other allownances or conveyances.
Posted 5th March 2013 From India, Mumbai
Dear sir, Greetings for the day, Normal rate of wages means that salary inclusive of all allowances. Thanks & Regards, From, Sumit Kumar Saxena
Posted 5th March 2013 From India, Ghaziabad
OT Is calculated on gross salary as per all labor laws... It is cent percent correct..... Regards, Jyoti
Posted 7th March 2013 From India, Kolhapur
Please go through the factory act which is self explanatory
Sec-59. Extra wages for overtime.(1) Where a worker works in a factory far more than nine hours in any day or for more than forty-eight hours in any week, he shall, in respect of overtime work, be entitled to wages at the rate of twice his ordinary rate of wages.

6[(2) For the purposes of sub-section (1), \'ordinary rate of wages\' means the basic wages plus such allowances, including the cash equivalent of the advantage accruing through the concessional sale to workers of food grains and other articles, as the worker is for the time being entitled to, but does not include a bonus and wages for overtime work.

(3) Where any workers in a factory are paid on a piecerate basis, the time rate shall be deemed to be equivalent to the daily average of their full time earnings for the days on which they actually worked on the same or identical job during the month immediately preceding the calendar month during which the over
Posted 12th March 2013 From India, New Delhi
Dear Friend Can you give me any reference form CLRA ACT for OT Calculation.
Posted 14th June 2013 From India, New Delhi
Hey Rains,
To count the overtime easily by your workers, you have to install a safe and secure biometric software. To know more about the biometric machine, take a tour at- Time and Attendance Software India | Time Tracking Software - Timelabs
Posted 19th December 2013 From India, Jaipur

The worker is daily wages u can calculate daily wages/8*2 * no of OT hrs.
If staff calculation is Basic + DA /30/8* No of OT Hrs.
If staff Salary is Above 10000 gross is there u can give comm off ot incentive.

This is our company formula.
I this is help u.

Posted 19th December 2013 From India, Osmanabad


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