Overtime rules in India
Section 59 of the Factories Act, 1948 requires that a worker who works more than 9 hours in a day or 48 hours in a week be paid overtime at twice the ordinary rate of wages. State Shops and Establishments Acts and the Minimum Wages Act carry the same double-rate rule for shops, offices and scheduled employments. The Occupational Safety, Health and Working Conditions Code, 2020 retains "twice the rate of wages" and limits overtime to 125 hours a quarter.
Formula
- Daily wage = Monthly wages ÷ 26 (weekly offs are paid, so 26 working days is the standard divisor)
- Hourly rate = Daily wage ÷ 8
- Overtime pay = Hourly rate × 2 × overtime hours
"Ordinary rate of wages" means basic wages plus dearness allowance and the cash value of any concessional food or amenities, but excludes bonus and overtime itself. Many companies add HRA and other fixed allowances by policy; enter the figure your policy uses.
Worked example
Monthly wages ₹20,800, 26-day month, 8-hour day, 10 hours overtime. Daily wage = 20,800 ÷ 26 = ₹800; hourly rate = 800 ÷ 8 = ₹100; overtime rate = ₹200 per hour; overtime pay = 200 × 10 = ₹2,000. Total wages for the month = ₹22,800. The table shows overtime pay at 5 to 60 hours so you can budget for peak months.
When to use a different multiplier
Some IT/ITES and managerial roles are exempt from statutory overtime, and employers pay 1× or 1.5× as a policy. Government and PSU rules sometimes use a 30-day divisor. Pick the divisor and multiplier that match your appointment letter or the applicable state rule; the calculator also warns when quarterly overtime would exceed the 125-hour cap.
Records to keep
Factories must maintain an overtime register (Form 10 in most states) showing hours worked, overtime hours and wages paid, and display the notice of working hours; inspectors check that overtime wages are paid along with the regular wage period.
Frequently Asked Questions
Is overtime always double the normal rate?
For workers covered by the Factories Act, Minimum Wages Act or state Shops Acts, yes — twice the ordinary rate. Supervisory and managerial staff above the wage threshold are usually outside these provisions and follow company policy.
Why divide monthly salary by 26 and not 30?
Weekly rest days are paid days, so a month has about 26 working days. Dividing by 26 gives the correct daily rate for an employee who is paid for 30 days but works 26.
Is overtime pay subject to PF and ESI?
Overtime is excluded from PF wages but included in ESI wages. It is fully taxable as salary.
What is the maximum overtime allowed?
Under the Factories Act (as amended by most states) and the OSH Code, 125 hours per quarter, with daily spread-over not exceeding 12 hours.
Disclaimer: This tool is for general information and estimation only. Tax rates and rules change — verify with official sources or a professional before acting. Read full disclaimer.