30/08/2026
Overtime Calculation – Payroll Basics
Basic Formula:
OT Rate per Hour = Applicable Normal Wage Rate per Hour × 2
📌 Example
Monthly Basic = 20,000
Working days = 26
Working hours = 8 hours/day
Step 1 – Daily Rate
20,000 ÷ 26 = 769.23
Step 2 – Hourly Rate
769.23 ÷ 8 = 96.15
Step 3 – OT Rate
96.15 × 2 = 192.30 per OT hour
If the employee worked 10 OT hours:
192.30 × 10 = 1,923 OT
⚠️ Important HR Note:
The calculation Basic ÷ 26 ÷ 8 is only an example, not a universal formula. The applicable wage components, normal working hours, employee category, applicable State/Central rules and company policy should be checked before processing OT. The statutory overtime rate is generally not less than twice the normal rate of wages, where applicable.
🧮 Simple Payroll Example
Employee worked 2 extra hours
Attendance confirms: 2 hours
Manager approved OT
Normal hourly rate: 100
OT rate: 200
OT Pay = 200 × 2 = 400
