Overtime calculation for workers

rains13 · #1 19-03-2008, 12:06 PM

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,

Regards,
Renu

sunil_1981dec · #2 25-03-2008, 10:59 AM

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

sunil_1981dec · #3 25-03-2008, 11:02 AM

Please ignore my earlier comment..

hi

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

Kumar H P · #4 25-03-2008, 11:14 AM

Overtime Calculation"

{[(Basic + DA) X (No. of OT hours )] / ( 26 X 8 )} X 2

26 is No. of Working Days .It may vary.
8 is No. of Working Hours

Act Applicable is Factories Act, 1948.]

Truly Yours,
Kumar H.P

vrusha · #5 25-03-2008, 11:17 AM

Hi.

In our company we are calculate OT rate as below

OT Rate = Basic + DA + HRA = Total
= Total / 26/8*2

Regards

Vrusha

rabindra kumar · #6 25-03-2008, 11:29 AM

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.

rains13 · #7 27-03-2008, 10:55 AM

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.

Regards,
Renu

Tony Yan · #8 27-03-2008, 11:10 AM

Why not try to employ more workers for shift work?

pgl · #9 22-08-2009, 08:46 PM

Hi,
I waiting for the correct calculation for OT . what in here so many ways.

saxenabrijesh21 · #10 24-08-2009, 12:34 PM

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

Regrds

Brijesh