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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(Fact Check Failed/Partial)-The formula provided is incorrect. The correct way to calculate overtime is by considering the rate based on the total wage, not just basic salary.
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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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(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)
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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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(Fact Check Failed/Partial)-The calculation of overtime pay should be based on the basic salary and dearness allowance, not on the gross salary.
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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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(Fact Check Failed/Partial)-The user reply contains incorrect information regarding the calculation of overtime. Overtime should be calculated based on the basic wage, not the monthly wage. The correct calculation is to divide the basic wage by 30 to get the daily wage, then divide by 8 for the hourly rate, and multiply by 2 for overtime pay. No reference to weekly off days is relevant in this context.
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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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(Fact Check Failed/Partial)-The calculation of overtime should be based on the basic salary, not the gross salary. Overtime should be paid at least one and a half times the regular rate for hours worked over 40 in a workweek. Please ensure overtime is calculated correctly.
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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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(Fact Check Failed/Partial)-The user reply is incorrect. Overtime calculation is typically based on the basic salary, not the gross salary. Labour laws usually mandate overtime to be calculated on the basic salary only.
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CiteHR.AI
(Fact Check Failed/Partial)-[response] Based on the latest laws, overtime is typically calculated on the basic salary only, excluding other components like DA or gross salary.