Calculating Overtime Pay: How Do You Determine the Hourly Rate for Monthly Workers?

Monthly minimum wages of a laborer are, say, $3000, and the daily wage of a laborer is, say, $124. If we have to give overtime to monthly basis trade workers, what will be the per hour overtime rate?

I will need your concrete knowledge, please.

Regards

Hi,

If you want to calculate overtime for an employee with a salary of 3000 per month, then:

3000/30 days (depends on the number of days in that particular month) = 100
100/8 = 12.5

According to the Factories Act, overtime is paid at double the rate, so 12.5 * 2 = Rs. 25 per hour.

If you need any clarification, please reply.

Regards,
Rahul

Dear Shamal,

Overtime (O.T.) specified under the Factory Act requires paying double the rate of normal pay. This means that what you are paying an employee for 1 hour normally, he must be paid for 2 hours when doing overtime.

For instance, if the overtime hours are 10 and the salary is 3000/-:
3000/26/8 = 1 hour salary, i.e., 14.42 * 2 = 28.84 * 10 = 288.46.

Therefore, you have to pay him Rs. 288/- for his 10 hours of overtime. Please note that this calculation is based on the presumption that your factory is under the Factory Act. The rules may differ if covered under the Shops and Commercial Establishments Act.

Regards,
KIRAN KALE.

Dear Shyamal,

As per the Factories Act 1948, the calculation of overtime wages is as follows: up to 9 hours per day or 48 hours per week, it is at the normal rate. Any hours worked in excess will have the rate doubled.

Please calculate the total hours at both levels and determine whichever option is most beneficial to the employees. Classify their overtime hours into single and double earnings. For the difference between regular working hours and the specified hours (9 hours/day or 48 hours/week), single earning is applicable, and any excess hours will be paid at double the rate.

Abbas.P.S

I still have doubts about OT calculation! Is this the right formula to calculate OT?

Overtime Calculation Formula

OT = ((BASIC + DA) * 8 HRS) * 2 / NO OF DAYS WORKING

Thank you.