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Tsivasankaran
Consultant
Skgiridhar
Entire Organisational Matters
PC Lohar
Service
Jsnegi
Service
Janardhanhv
Sr. Manager - Hr & Admin
Mallikarjunaiah
District Program Manager
Ambikumar
Hr Incharge
+3 Others

Dear All,
Please share your knowledge regarding the calculation of Overtime rate for Monthly paid employee.
(Amounts in INR)
Monthly Basic Pay - 5000
Monthly D.A. - 3000
Month - October
What will be the overtime rate?
1) (((5000+3000)/31)/8)*2 = 65 OR - (here 31 means no. of days in October)
2) (((5000+3000)/26)/8)*2 = 77 OR - (here 26 means common working days in a month)
3) ((5000+3000)/200)*2 = 80 (here 200 means 25 days x 8 hrs)
The above calculations are based on various posting on this site and also in other sites regarding OT Rate calculation.
Therefore, to put an end to this issue, please share your expert views with supporting Rule or Act or Notifications or Judgements etc.(if any) on how to calculate Overtime Rate for Monthly paid employee.
Regards to all members,
Tony
28th September 2012 From India, Cochin
Dear Tony,
The OT has to be calculated as per their extra hours which is beyond 8 hours of their work. Like if they work for 10 hours then you have pay OT for 02 hours.
The formula for calculation is to be done on Gross not on basic as per factory act, whereas many co's are paying on basic or Basic+DA. As per minimum wages the OT has to be calculated on Basic+VDA or on Gross.
=Gross /240*2*No. of hours worked.
As per your above details here comes (Basic+ DA) 8000/240 x 2 x no. of hours worked = will be the amount.
Hope this will clear your doubts.
29th September 2012 From India, Secunderabad
Dear Tony, Greetings for the day! Beyond 8 hours of working has to be calculate as Over Time work 'OR' extra hours working. For calculation of OT rate/hour, ur formula at Sl.No. 2 is correct.
29th September 2012 From India, Sirohi

To pay the overtime always follow the rules of payment and wages act here I am giving an example for your help
payment of an employee as follows .
Basic 5000/-
D A 3000/-
other 3000/-
total 11000/-
rate = [(11000/26)8]X 2
= 106/-
for more details you can contact me at 08894128690

29th September 2012 From India, Shimla
I am attaching various probabilities for calculating OT. This will vary if you work for 6 days a week and 5 days a week and 5.5 days a week and also 8 hours in a day or 9 hours in a day. Based on all four probable scenarios which I have handled, I have given calculation in the attached word document i n a tabulated format
T Sivasankaran
29th September 2012 From India, Chennai

Attached Files
 Membership is required for download. Create An Account First Monthly rated OT.docx (12.6 KB, 265 views)

Even more simple calculation for overtime payments as per factories act calculation on Basic+DA only not other benefits
for Example
Basic 5000/-
D A 3000/-
total 8000/-
rate = [(8000/208]X 2 = 76.92/-
BASIC+DA/standard working hours*overtime hours*2
Note : 208 is a standard working hour for the month.
Thanks & Regards
Janardhan
30th September 2012 From India, Bangalore
OT can be calculated on following method 1. Gross Salary/31or 30/8*2*No of OT hrs, if salary is being paid on monthly basis 2. Gross Salary/26/8*2*No of OT hrs, if on daily basis
1st October 2012 From United States, Chicago
First you have to find how much working hours in a month. if it is 8 hrs per day then on the basis of all working days multiply and get the total working hours per month.In some organisation saturday is half day, in some organisation saturday is a holiday.So the working hours in those cases will vary for calculating the OT rate.
Now the salary portion basic+DA+VDA= total salary /working hours for the month = ot rate
thanks
1st October 2012 From India, Calcutta
THE FACTORIES ACT [Act No. 63 of 1948] As amended by the Factories (Amendment) Act, 1987] .
. CHAPTER VI, Working Hours of Adults .
....
59. Extra wages for overtime
(1) Where a worker works in a factory for 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.
92[(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 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 piece-rate 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 jo
1st October 2012 From India, Bangalore
Dear Mallikar junaiah, Thanks for your information for the Overtime Act. Best Regards, Ambika
2nd December 2016 From India, undefined

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