How to Calculate Overtime
Maximum Working Hours
In most state Shops and Establishment Acts and as per Section 25 of the Occupational Safety, Health and Working Conditions Code, 2020 (OSH Code), working hours cannot exceed 8 hours per day. In case a worker works more than 8 hours, that time is considered overtime, and the worker is entitled to compensation for it.
Overtime Wages Rate
As per Section 14 of the Code on Wages, 2019 and Section 27 of the OSH Code, 2020, both prescribe that overtime wages should be twice the normal rate of wages.
Therefore:
\(\text{Overtime Wages} = 2 \times \text{Normal Rate of Wages}\)
Calculation of Overtime Hours
The formula to calculate overtime is given under Rule 69 of the OSH Code. It states that a worker working more than 8 hours per day or 48 hours per week is entitled to overtime at twice the rate of normal wages.
How to Calculate the Wage Rate
To determine the correct wage rate, the following calculations apply:
\text{Daily Wages for Monthly Workers}
=
\frac{\text{Monthly Wages}}{26}
\]
\text{Hourly Wages}
=
\frac{\text{Daily Wages}}{8}
\]
Rounding of Overtime Hours
The rules for rounding overtime hours are as follows:
- If the excess time is between 15 to 30 minutes, it will be counted as 30 minutes (0.5 hour).
- More than 30 minutes will be rounded up and counted as 1 full hour on an actual basis.
Note: Wages should be calculated as per the new wage definition in the Code on Wages under Section 2(y).
Final Formula
\[
\text{Overtime Wages}
=
2 \times
\left(
\frac{\text{Monthly Wages}}{26 \times 8}
\right)
\times
\text{Number of Hours Worked}
\]
Overtime Wages Calculator
Overtime Wages: ₹0.00 🙌
This work is licensed under CC BY-NC-SA 4.0
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