Industrial Relations And Labour Laws
+1 Other

Dear All,

There is some confusion regarding the over time payment. As per law it should be double payment of wages and wages includes the many components. My question is which component should be taken for OT calculation. Can we take all component or only Basic & DA. Our wages components are basic, DA, HRA and Conveyance. What the law says?

Arun Gupta
7th February 2011 From India, Delhi
As per law wages means basic wage and dearness allowance and as such you can calculate OT on basic and DA only. However, there can be a different argument from the workers that their basic wages is put at a lower level purposefully to reduce so many burdens like bonus, EPF contribution by the employer etc and their salary have been bifurcated in to small components just to benefit the employer and not the employee. Accepting their stand, the total salary for which they are entitled had they work for a day will have to be taken as base for calculation of overtime wage. Invariably, the same wage will be deducted if they absent themselves from work or they take leave without pay.
7th February 2011 From India, Kannur
Thanks Madhu, We have not bifurcated the minimum wages. Apart from minimum wages we are giving other allowances. If case like this then what? Regds Arun Gupta
8th February 2011 From India, Delhi
I have a doubt after calculating OT.
To calculate PT, as per law do we need to add OT to gross salary to calculate PT?
Below is the calculation i am doing please advice.
Salary Rs 8,980
Basic - 3592
HRA - 1437
Conv - 800
Med - 1200
Other Allow - 1901
OT - 1356
Gross Salary - 10,336
PT - 150
PF - 431
In this case emp salary is Rs 8,980. If i add OT within Gross salary then gross salary will increase more than Rs 10,000 then emp need to pay P.T.
So please help me OT should add within Gross Salary or Outside Gross Salary.
Edit/Delete Message
20th July 2011 From India, Bangalore
Profession Tax is not actually on 'salary' but it has a wider interpretation that it should be calculated on incomes received by an employee or profession. A Doctor or Lawyer is also expected to pay Profession Tax though they are not in receipt of any salary. Therefore, strictly speaking, all components of salary or remuneration irrespective of whether it is basis salary or OT wages or even bonus are to be taken into account for calculation of profession tax. However, the tax on profession being a state subject, there may be different interpretations in this regard. Therefore, you are requested to go through the definition of income received/ salary etc as gven in your state's Act.
21st July 2011 From India, Kannur
Madhu thanks for your reply.
i am working in a factory. here every one saying that OT should not be considered to calculate PT.
now i am just trying to find any written document on that. please let me know if you have any.
22nd July 2011 From India, Bangalore
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