Dear Sir, I just want to know the way of calculation of OT under the Maharashtra Shop and Establishment Act. Is it calculated on basic or gross salary? Additionally, should wages be divided by 26 or 30 days to calculate OT?
Anil Tyagi
(1) Is OT calculated on basic or gross?
Ans: OT shall be calculated on Basic + DA and not on Gross.
Reference - Sec 15 of MH Shop Act & Definition of wages under Payment of Wages Act
(2) Should wages be divided by 26 or 30 days?
Ans: Generally, it is 26; there is no legal bar for denomination. However, you can consider as per your company policy, which should be the same for all purposes and for all employees.
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