Overtime is simple arithmetic on a base people disagree about
Calculate overtime pay from the monthly wage, ordinary daily hours and the statutory multiplier — with the wage base and rate caveats stated.
Overtime calculator
Overtime pay at a multiple of the ordinary hourly rate, as prescribed by the Factories Act and the applicable state rules.
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The Rate
The Factories Act prescribes twice the ordinary rate of wages for overtime work.
The Hourly Base
Monthly wage divided by 26 days, then by ordinary daily hours.
The Disagreement
Which components make up the wage base. Confirm it against your rules before relying on any figure.
How overtime is calculated
Overtime is the ordinary hourly rate multiplied by the statutory multiplier, multiplied by the hours worked beyond the ordinary schedule. The Factories Act prescribes twice the ordinary rate, and state rules and the Shops and Establishments Acts carry their own provisions.
The ordinary hourly rate used here is the monthly wage divided by 26 days and then by the ordinary daily hours — so a wage of ₹26,000 with an eight-hour day gives ₹125 an hour, and overtime at twice that is ₹250.
Overtime is measured against scheduled hours, which is why the shift roster matters: without one, there is no agreed baseline from which to count.
Where overtime calculations go wrong
The wage base. Which components count towards the ordinary rate is the most contested part, and the answer depends on your establishment type and state. Computing on basic alone where the rules require a wider base understates every overtime payment.
Breaks counted as worked time. A shift that includes an unpaid meal break is not eight hours of work. Paying overtime on the canteen break is a real and surprisingly common error, and it is discovered when someone reconciles the total hours paid against the hours the roster scheduled.
Statutory limits. There are caps on overtime hours per day, per week and per quarter. Paying overtime correctly does not make exceeding those limits lawful — the payment and the limit are separate obligations.
Consent and rostering. Overtime that is scheduled rather than voluntary raises different questions again, particularly where it becomes a standing feature of the roster.
Overtime calculator FAQs
Is overtime always double the rate?
The Factories Act prescribes twice the ordinary rate. Other establishments are governed by the applicable state Shops and Establishments Act, so confirm the rate that applies to you.
What counts as the wage for overtime?
It depends on the establishment type and state rules, and it is the most contested part of the calculation. Computing on basic alone is often too narrow.
Is there a limit on overtime hours?
Yes — caps apply per day, per week and per quarter. Paying correctly does not authorise exceeding them; they are separate obligations.
Is overtime always paid at twice the ordinary rate?
The multiplier is set by the applicable Act and rules for your establishment type and state, and it is not uniform across the country. Assuming a single national rate is where most overtime disputes begin.
Does overtime apply to staff on a monthly salary?
Eligibility turns on the category of worker and the applicable legislation, not on whether pay is monthly or daily. Exempting all monthly-paid staff by default is a position that does not always hold.
Do breaks count towards overtime hours?
No. Time on the premises is not time worked. Paying overtime on an unadjusted in-to-out span is the single most expensive attendance error we see, and it compounds every month.
Can we give compensatory time off instead of paying overtime?
Sometimes, depending on the applicable rules — and where it is allowed, the compensatory day must actually be granted and recorded, not merely promised. An unrecorded promise becomes a claim at exit.
Stop calculating this one employee at a time
Klok computes this on every payroll run, for every employee, from your own attendance and salary data — with the working shown.