how to calculate ot its on basic + Da or on gross salary
From India, Kolhapur
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3From India, Kolhapur
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Dear Member, First decide the applicability of the Act under which you are liable to pay the overtime to your employees/ workers & then go through the provision relating to OT payment. R.N.KHOLA
From India, Delhi
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From India, Delhi
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it’s simple 1 hr ot = (((basic+DA)/26)/8)*2 26 indicates no. of days in month. 8 indicates no. of hours per day This formula is using in my company.....
From India, Bellary
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From India, Bellary
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Dear Member,
If your wage structure also includes other components besides Basic & DA, please let us know under which Act you are utilizing this formula for the proper enforcement of OT payment.
R.N.KHOLA
From India, Delhi
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If your wage structure also includes other components besides Basic & DA, please let us know under which Act you are utilizing this formula for the proper enforcement of OT payment.
R.N.KHOLA
From India, Delhi
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Dear Member,
Sub-Sec (1) Sec. 59 of the Factories Act 1948 provides that where a worker works in a factory for more than 9 hours in any day or for more than 48 hours in any week, he shall, in respect of overtime work, be entitled to wages at the rate of twice his ordinary rate of wages.
Sub-sec. (2) of Sec. 59 provides that "ordinary rate of wages" means the basic wages plus such allowances, including the cash equivalent of the advantages through the concessional sale to workers of food grains and other articles as the worker is for the time being entitled to, but does not include a bonus and wages for overtime work.
To calculate overtime: Basic + DA / 30 = one day wages divided by 8 = 1 hour wages multiplied by 2, you get twice the rate of overtime.
R.L. Dhingra, Advocate & Labour Law Consultant, 09818309937
From India, Delhi
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Sub-Sec (1) Sec. 59 of the Factories Act 1948 provides that where a worker works in a factory for more than 9 hours in any day or for more than 48 hours in any week, he shall, in respect of overtime work, be entitled to wages at the rate of twice his ordinary rate of wages.
Sub-sec. (2) of Sec. 59 provides that "ordinary rate of wages" means the basic wages plus such allowances, including the cash equivalent of the advantages through the concessional sale to workers of food grains and other articles as the worker is for the time being entitled to, but does not include a bonus and wages for overtime work.
To calculate overtime: Basic + DA / 30 = one day wages divided by 8 = 1 hour wages multiplied by 2, you get twice the rate of overtime.
R.L. Dhingra, Advocate & Labour Law Consultant, 09818309937
From India, Delhi
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(Fact Checked)-The explanation provided is accurate based on Sec. 59 of the Factories Act, 1948. The formula given for calculating overtime wages is correct and aligns with the law. (1 Acknowledge point)
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Hi Mr. Dhingra, Absolutely correct and has given ideas to those who calculating Over time on Basic+DA.
From India
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From India
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Dear Mr. Dingra,
Under the Minimum Wages Act, wages are considered for 26 days, and this is also followed under the Gratuity Act. In payroll computations, we divide the wages by 26 to arrive at the loss of pay.
On the same basis, I was under the impression that for overtime (OT), the Basic + DA should be divided by 26 instead of 30. Kindly correct me if I am wrong.
Regards,
M.V. Kannan
From India, Madras
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Under the Minimum Wages Act, wages are considered for 26 days, and this is also followed under the Gratuity Act. In payroll computations, we divide the wages by 26 to arrive at the loss of pay.
On the same basis, I was under the impression that for overtime (OT), the Basic + DA should be divided by 26 instead of 30. Kindly correct me if I am wrong.
Regards,
M.V. Kannan
From India, Madras
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(Fact Checked)-The calculation of overtime (OT) should be based on the Basic + DA wages divided by 26 days, not 30. This aligns with labor laws for accurate pay computations. Thank you for your input and willingness to learn more about this topic. (1 Acknowledge point)
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Dear MV Kannan,
We divide the wages by 26 because it includes the weekly off days. When calculating overtime (OT), divide the monthly wages by 30, then by 8 to get the hourly wages, and multiply by 2 as the workman has to be paid at twice the rate. In the case of employment in agriculture, it should be multiplied by 1.5 times.
RL Dhingra, Advocate and Labour Law Consultant, 09818309937
From India, Delhi
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We divide the wages by 26 because it includes the weekly off days. When calculating overtime (OT), divide the monthly wages by 30, then by 8 to get the hourly wages, and multiply by 2 as the workman has to be paid at twice the rate. In the case of employment in agriculture, it should be multiplied by 1.5 times.
RL Dhingra, Advocate and Labour Law Consultant, 09818309937
From India, Delhi
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Dear Mr. Dhingra,
Our company is already paying basic wages lower than the minimum wage as decided in our zone. However, when looking at the gross pay, it appears to be higher than the minimum wage.
Due to the basic wages being below the minimum wage, we have been calculating overtime based on the gross pay only, and that too at a single rate, not double. Is this arrangement acceptable?
I look forward to your reply.
Thanks & Regards,
Sandeep Patel
(M): 9725667986
From India, Vadodara
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Our company is already paying basic wages lower than the minimum wage as decided in our zone. However, when looking at the gross pay, it appears to be higher than the minimum wage.
Due to the basic wages being below the minimum wage, we have been calculating overtime based on the gross pay only, and that too at a single rate, not double. Is this arrangement acceptable?
I look forward to your reply.
Thanks & Regards,
Sandeep Patel
(M): 9725667986
From India, Vadodara
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Kindly note that the term here "Ordinary Rate" refers to gross salary but the labour officers allows to calculate on Basic + DA
From India, Vadodara
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From India, Vadodara
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Kindly note that Kindly note that the term here "Ordinary Rate" refers to gross salary but the labour officers allows to calculate on Basic + DA
From India, Vadodara
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From India, Vadodara
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Dear All,
Overtime (OT) will be calculated on Basic + DA + any other fixed allowances like House Rent Allowance (which is paid monthly and on a regular basis). Any fixed allowance paid on a monthly basis, please check with the law of the land before OT exemption.
Thank you.
From India, Kolkata
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Overtime (OT) will be calculated on Basic + DA + any other fixed allowances like House Rent Allowance (which is paid monthly and on a regular basis). Any fixed allowance paid on a monthly basis, please check with the law of the land before OT exemption.
Thank you.
From India, Kolkata
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(Fact Checked)-The user's reply is correct. They accurately mentioned that OT should be calculated on Basic + DA + any other fixed allowances like House Rent Allowance. Thank you for the informative response! (1 Acknowledge point)
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In my point of view, overtime is calculated based on the gross salary, i.e., gross salary/26/8 * working hours * 2. Here, 26 represents the number of working days, 8 stands for the number of working hours, and 2 indicates twice the rate of wages.
Thanks & Regards,
Sumit Kumar Saxena
From India, Ghaziabad
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Thanks & Regards,
Sumit Kumar Saxena
From India, Ghaziabad
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Do we need to add HRA also in to ordinary wages while calculate OT Wage
From India, Satna
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From India, Satna
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As per factory act 1948, OT should be calculated on ordinary monthly wage(Basic +DA+ HRA+other allowances) by the using formula = Gross/26 days/8 daily working hour * OT Hour done*2(twice).
In Factory Act, 1948 ...Payment for overtime, Section 59.—Where a worker works in a factory for more than nine hours in any day or for more than 48 hours in any week, he shall, in respect of overtime work, be entitled to wages at the rate of twice its ordinary rate of wages.
From India, Muzaffarnagar
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In Factory Act, 1948 ...Payment for overtime, Section 59.—Where a worker works in a factory for more than nine hours in any day or for more than 48 hours in any week, he shall, in respect of overtime work, be entitled to wages at the rate of twice its ordinary rate of wages.
From India, Muzaffarnagar
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(Fact Checked)-The user's reply is correct. It is important to consider the specific wage structure and applicable laws when calculating overtime pay. (1 Acknowledge point)