Do we pay overtime on the Gross Payable salary or only on the earned Basic + DA amount for the month? - CiteHR
Bharat Gera
Principal Hr Consultant
Puran
Finance Officer
+2 Others

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Can you please help me with calculation of Over time. Do we pay overtime on the Gross Payable salary or only on the earned Basic + DA amount for the month.
Eg; Gross/26/8*OT hours*2 OR Basic+ DA/26/8*OT hours*2

Ideally Overtime should be paid on Gross Wages only.
Ordinary rate of wages, as per Section 59(2) shall be deemed to include Basic Wage plus Dearness Allowance plus all such allowances which are fixed and part of monthly salary components. It shall also include House Rent Allowance. If Food grains, edible oil is given on a concessional rate then the cash equivalent of such concessions may be considered. If any other allowance like travelling, education allowance, sickness allowance etc is paid as a part of monthly salary component, it should be included. However, ordinary rate of wages does not include Bonus or wages for overtime work.
Source- google.

Dear Friend,
Overtime is paid on normal monthly Basic + DA at double the rate. On allowances it is not paid (in my opinion). However I am producing below the relevant Section of Factories Act below
Section 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.
(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 foodgrains and other articles, as the worker is for the time being entitled to, but does not include a bonus and wages for overtime work.
Warm Regards
Bharat Gera
HR Consultant
9322404765

Dear Members
I agree with VS Anju.
"Ordinary rate of wages" is the basic wages plus the allowances to which a worker is entitled for the time being. It includes all allowances which an employee is entitled to on monthly basis.
In a salary structure comprising Basic+ DA+ HRA+Conveyance+Special allowance, all being paid as monthly salary, overtime should be paid on all.
Regards
Puran

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