How to Calculate Overtime Pay in India – Formula & Examples (2026)

What Counts as Overtime in India?

In India, overtime (OT) is any work done beyond the normal working hours fixed by law or by the employment agreement. Under the Factories Act, 1948 normal hours are 9 hours a day / 48 hours a week. Anything beyond that is OT.

Most Shops & Establishment Acts (state-specific) cap daily hours at 9 and weekly hours at 48 as well, so the overtime trigger point is the same for a factory worker and a shop helper in most states.

The Overtime Pay Formula in India

The standard overtime calculation formula under the Factories Act is:

Overtime Pay = Hourly Rate × 2 × Overtime Hours

In other words, every OT hour is paid at twice the normal hourly rate. This is called "double wages for overtime" and applies to most workers under the Factories Act and the Minimum Wages Act.

Step 1 – Find the Hourly Rate

For a monthly-salaried worker:

Hourly Rate = Monthly Basic Salary ÷ (Working Days × Daily Hours)

For a daily-wage worker:

Hourly Rate = Daily Wage ÷ Daily Hours

Step 2 – Multiply by 2

Double the hourly rate — this is the OT rate per hour.

Step 3 – Multiply by OT Hours

Multiply the OT rate by the actual overtime hours worked in the month. That's the OT pay to add to the salary slip.

Overtime Calculation Example 1 – Monthly-Salaried Worker

Ramesh works in a ceramics unit in Morbi. His basic salary is ₹15,600/month. He works 26 days, 8 hours per day. In April 2026, he did 20 hours of overtime.

• Hourly Rate = 15,600 ÷ (26 × 8) = ₹75/hour
• OT Rate = 75 × 2 = ₹150/hour
• OT Pay = 150 × 20 = ₹3,000

Ramesh's April salary = 15,600 + 3,000 = ₹18,600 (before deductions).

Overtime Calculation Example 2 – Daily-Wage Worker

Suresh is a construction labourer on a daily wage of ₹600 for 9 hours. In one week he worked 12 hours of OT.

• Hourly Rate = 600 ÷ 9 = ₹66.67/hour
• OT Rate = 66.67 × 2 = ₹133.33/hour
• Weekly OT Pay = 133.33 × 12 = ₹1,600

Overtime Calculation Example 3 – Shop Worker under Shops & Establishment Act

Priya works at a retail shop in Mumbai for 10,000/month basic. She works 6 days × 9 hours = 54 hours/week. In one month she has done 10 OT hours.

• Daily Hours × Working Days = 9 × 26 = 234 hours/month
• Hourly Rate = 10,000 ÷ 234 = ₹42.74/hour
• OT Rate = 42.74 × 2 = ₹85.47/hour
• OT Pay = 85.47 × 10 = ₹854.70

Overtime Rate Table – Quick Reference for India

Worker Type	Normal Hours	OT Multiplier	Legal Basis
Factory worker	9/day, 48/week	2× hourly rate	Factories Act 1948, Sec 59
Shop employee	9/day, 48/week	2× hourly rate	State Shops & Estab. Act
Minimum-wage worker	As notified	2× hourly rate	Minimum Wages Act 1948
Construction labour	As per contract / 9 hrs	2× hourly rate (typical)	BOCW Act / contract

Common Mistakes in Overtime Calculation

• Using gross salary instead of basic: OT is legally calculated on basic wage + DA, not on gross salary including HRA and conveyance.
• Paying 1.5× instead of 2×: Unlike the US or UK, India mandates double wages for OT, not 1.5×.
• Skipping weekly offs: Work on a weekly off often attracts a different rate — check your state Shops Act.
• Not counting every minute: Keep attendance in hours and minutes, not just in full days.
• Forgetting to record OT on the hajri card: If OT isn't on the attendance sheet, it never gets into the salary slip.

Free Overtime Calculator — Or Just Use a Hajri Card App

Doing this math for 20 or 50 employees every month is error-prone. A modern hajri card app records every OT hour against each employee's daily attendance and auto-calculates OT pay on the monthly salary slip.

In Staff Hisab, you just mark OT hours next to each day. At the end of the month, the app multiplies them by the worker's hourly rate × 2 and adds the result to the salary slip PDF — no formula sheets, no Excel errors.

Overtime Pay in India – FAQ

Is overtime double the salary in India?

Yes, for almost all categories of workers covered by the Factories Act, Shops Act or Minimum Wages Act, overtime is paid at twice the ordinary hourly rate.

Is overtime mandatory in India?

Overtime work is not mandatory for the employee. But if an employer asks a worker to stay beyond normal hours and the worker agrees, OT pay at 2× becomes legally due.

How many OT hours can an employee work per week?

The Factories Act caps total hours (normal + OT) at 60 per week, and total OT in a quarter at 50 hours. Exceeding these limits can attract penalties.

Is OT calculated on basic or gross salary?

OT is calculated on basic salary (plus DA where applicable), not on gross salary. Allowances like HRA and conveyance are not included in the OT base.