Overtime Pay Calculator

Five thousand for ten hours

On a monthly salary of ₹52,000 with 26 working days of 8 hours, the hourly rate is ₹250. Ten overtime hours at a 2× multiplier produce ₹5,000 of overtime, taking the month's total to ₹57,000.

How the rate is derived

Hourly rate = monthly salary ÷ (working days × hours per day) 52,000 ÷ (26 × 8) = 52,000 ÷ 208 = ₹250

Overtime pay = hourly rate × OT hours × multiplier 250 × 10 × 2 = ₹5,000

The 26-day convention matters and is widely used in Indian payroll — it treats a month as six working days a week, which is the basis the Factories Act and most state Shops and Establishments Acts assume. Some employers use 30 days instead, which lowers the derived hourly rate: at 30 days, the same salary gives an hourly rate of ₹216.67 and the same ten hours of overtime pay ₹4,333.

That difference is worth checking on your own payslip, because it is a 15% variation in every overtime calculation with no change in the underlying salary.

What the law requires

The Factories Act 1948 requires overtime at twice the ordinary rate of wages for work beyond 9 hours in a day or 48 hours in a week, for workers covered by the Act. State Shops and Establishments Acts carry broadly similar provisions with local variations, and the newer labour codes retain the double-rate principle.

Two significant qualifications:

Coverage is not universal. Overtime provisions apply to "workers" as defined in the relevant statute. Employees in managerial, administrative or supervisory roles above stated thresholds are typically excluded, which is why most salaried professional roles in IT and services carry no statutory overtime entitlement at all.

A 1.5× multiplier is contractual, not statutory in most Indian contexts. Where it applies, it comes from company policy rather than from the Act, which specifies double.

What counts towards the calculation

Ordinary rate of wages under the Factories Act includes basic wages plus allowances, but generally excludes bonus and overtime itself. In practice many employers compute overtime on basic alone, which produces a materially lower figure than using gross.

If your overtime looks lower than this calculator suggests, the base being used is the most likely reason — ask which figure payroll applies.

Reading the result

Overtime pay is fully taxable as salary income in the month received, and it can push a month's TDS up noticeably.

Note also the statutory limits on overtime hours, which exist for safety rather than pay: the Factories Act caps overtime at 50 hours per quarter in most states, with some states permitting more under notified exemptions. An employer routinely exceeding these is in breach regardless of whether the hours are paid.

For employees genuinely outside overtime coverage — most salaried professional roles — the practical position is that extra hours are unpaid, and the relevant conversation is about workload and compensatory time off rather than about a multiplier.

Common mistakes

Assuming 30 days instead of 26. It changes the hourly rate by about 15%.

Expecting statutory overtime in a managerial role. Most such roles are excluded by definition.

Computing on gross when the employer uses basic. Check which base applies.

Treating 1.5× as the legal minimum. The Factories Act specifies twice the ordinary rate.

Ignoring the quarterly cap. Limits on overtime hours exist independently of whether the hours are paid.