Overtime Calculation In Private Companies

As per Factories Act 1948 calculation of overtime wages is as follows.

Upto 9 hrs per day or 48 hrs per week, it is normal rate. In excess, the rate will be doubled.

Accordingly calculate the difference between the scheduled working hours and the hours secified above. For the difference the OT payment will be @single rate and in excess double. If there is any difference between the calculation on daily and weekly basis, whichever is beneficial to employee has to be paid.

For example: A company woks 6 days in a week with a uniform working time of seven and half hrs per day (8hrs including 30 minutes break). Let a worker works for 2.5 hrs extra, i.e total 10 hrs in a day, whose per hour remuneration is Rs.30/. Then the over time payment calculation will be as follows.

1) Daily basis : Scheduled time - 7.5 hrs
OT time @ normal rate - 9 -7.5 = 1.5 hrs
OT payment - 1.5 x 30 = Rs. 45 - (A)
OT time @ double rate - 10 - 9 = 1 hr
OT payment - 1 x 30x2 = Rs. 60 - (B)
Total - 45+60=105/-

2) Weekly basis : Scheduled time - 7.5 x 6 = 45 hrs
OT time @ normal rate - 47.5 -45 = 2.5 hrs
OT payment - 2.5 x 30 = Rs. 75 - (A)
OT time @ double rate - 47.5 - 48 = NA
OT payment - 0 x 30x2 = Rs. 0 - (B)
Total - 75+0=75/-

Whichever high is Rs. 105 (daily basis)

If the above worker works additional 2.5 hrs each for three days in the same week, then the calculation will be as follows.

1) Daily basis : Scheduled time - 7.5 hrs
OT time @ normal rate - 9 -7.5 = 1.5 hrs
OT payment - 1.5x3 x 30 = Rs. 135 - (A)
OT time @ double rate - 10 - 9 = 1 hr
OT payment - 1x3 x 30x2 = Rs. 180 - (B)
Total - 135+180=315/-

2) Weekly basis : Scheduled time - 7.5 x 6 = 45 hrs
OT time @ normal rate - 48-45 = 3 hrs
OT payment - 3 x 30 = Rs. 90 - (A)
OT time @ double rate - 52.5 - 48 = 4.5 hrs
OT payment - 4.5 x 30x2 = Rs. 270 - (B)
Total - 90+270=360/-

Whichever high is Rs. 360 (weekly basis)

Abbas.P.S