Overtime Calculation in India (2026): Formula, Rules, and Real-Life Examples
Does your HR team calculate overtime manually every month?
Are employees complaining that their OT pay is wrong?
This blog explains how overtime works in India – the formula, the rules, and how Tankhwa Patra hrms software calculates it automatically. Simple language. Real examples.
| The Basic Overtime Formula |
Every overtime calculation in India follows 3 simple steps.
| Step 1 – Find per day salary Per Day Salary = Monthly Gross divided by Working Days Example: Rs 30,000 divided by 26 days = Rs 1,153 per day |
| Step 2 – Find per minute rate Per Minute Rate = Per Day Salary divided by 480 minutes Example: Rs 1,153 divided by 480 = Rs 2.40 per minute |
| Step 3 – Calculate overtime pay OT Pay = OT Minutes x Per Minute Rate x OT Ratio Example: 60 minutes x Rs 2.40 x 2 = Rs 288 |
| Tankhwa Patra Default If you do not enter working days, the hrms software divides by total month days. If you do not enter shift minutes, it divides by 480. These are automatic defaults in Tankhwa Patra hr and payroll software. |
| Example: Ramesh earns Rs 18,000 per month Per day: Rs 18,000 divided by 26 = Rs 692 Per minute: Rs 692 divided by 480 = Rs 1.44 OT worked: 90 minutes OT ratio: 2x (Factories Act) OT Pay: 90 x Rs 1.44 x 2 = Rs 259.20 Take-home this month: Rs 18,000 + Rs 259.20 = Rs 18,259.20 |
| What the Law Says About Overtime |
| Rule | Factories Act (Workers) |
| Normal hours | 9 hours/day, 48 hours/week |
| Max with OT | 10.5 hours/day, 60 hours/week |
| OT rate | 2x normal wage |
| Who gets it | All covered workers |
| Overtime on a Half Day – 2 Settings |
What if an employee works a half day and then stays extra? Should that count as overtime?
Tankhwa Patra gives you 2 options to control this.
Setting 1 – Minimum Minutes for Overtime
You set a minimum number of extra minutes needed before OT is counted.
If the employee works less than this minimum – no OT is given.
| Example: Minimum Minutes set to 30 Employee works 25 minutes extra on a half day 25 is less than 30 – NO overtime recorded — Employee works 45 minutes extra on another day 45 is more than 30 – 45 minutes OT is recorded and paid |
Setting 2 – Skip Minutes in Overtime
You set a number of minutes to skip from the start of overtime.
The first few minutes are ignored. Only time beyond the skip counts.
| Example: Skip Minutes set to 15 Employee works 40 minutes extra Skip first 15 minutes 40 minus 15 = 25 minutes counted as OT OT pay calculated on 25 minutes – not 40 |
| Set Extra Overtime |
This adds a fixed number of bonus minutes on top of the actual OT worked.
Used when you want to compensate employees for travel or preparation time.
| Example: Extra OT set to 10 minutes Employee actual OT: 60 minutes Extra OT bonus: 10 minutes Total OT counted: 70 minutes OT Pay: 70 x Rs 2.40 x 2 = Rs 336 |
| 3 Ways to Calculate Overtime Minutes |
Tankhwa Patra gives you 3 methods to count OT minutes. Pick the one that fits your business.
1. Actual
Counts the exact minutes worked beyond the shift. Most accurate.
| Example: Actual OT Shift ends at 6:00 PM Employee leaves at 6:53 PM OT = 53 minutes exactly Paid for 53 minutes |
2. SlotWise
Counts OT in complete slots only. Partial slots are not paid.
| Example: Slot size = 30 minutes Employee works 75 minutes OT Complete 30-minute slots: 2 slots = 60 minutes Remaining 15 minutes – not a complete slot – not paid Paid for 60 minutes only |
3. Round Off
Rounds OT minutes to the nearest configured unit.
| Example: Round off unit = 15 minutes Employee works 52 minutes OT Nearest 15: rounds to 60 minutes Paid for 60 minutes — Employee works 22 minutes OT Nearest 15: rounds to 15 minutes Paid for 15 minutes |
| Give Overtime As – 3 Options |
Once OT is calculated, how do you give it to the employee? Tankhwa Patra gives you 3 choices.
| Option | What It Means |
| Overtime Pay | Extra cash added to salary this month. Shown on salary slip. |
| Compensatory Off | Employee gets a day off instead of cash. Stored in hrms leave management. |
| Off Extra Days | Extra leave days given on top of regular leave. Tracked separately. |
| How Overtime Shows on the Salary Slip |
When OT is given as cash, it appears as a separate line on the payslip.
The employee can see it in the employee hrms app on their phone.
| Example: Sample Salary Slip Basic Salary: Rs 15,000 HRA: Rs 6,000 Special Allowance: Rs 4,000 Overtime (90 min): Rs 259 <– Shown separately PF Deduction: Rs 1,800 ESI Deduction: Rs 135 Professional Tax: Rs 200 Net Salary: Rs 23,124 |
| Overtime Ratio – 3 Ways to Configure |
The OT ratio decides how much extra an employee earns per OT minute. Tankhwa Patra gives you 3 options.
1. Same OT Ratio for All Shifts
One ratio for everyone. Easy to set up.
| Example: All shifts set to 2x Morning shift employee – 60 min OT – paid at 2x Night shift employee – 60 min OT – also paid at 2x |
2. Shift Wise OT Ratio
Different ratio for different shifts. Night shift workers get more.
| Example: Shift wise ratios Morning shift: 1.5x Afternoon shift: 1.75x Night shift: 2x Night shift employee works 60 min OT: 60 x Rs 2.40 x 2 = Rs 288 Morning shift employee works 60 min OT: 60 x Rs 2.40 x 1.5 = Rs 216 Afternoon shift employee works 60 min OT: 60 x Rs 2.40 x 1.75 = Rs 252 |
3. Slab Wise OT Ratio
Ratio increases the more OT an employee works.
| Example: Slab wise ratios 0 to 120 minutes OT: 1.5x 121 to 240 minutes OT: 2x Above 240 minutes OT: 2.5x Employee works 180 minutes OT: First 120 min at 1.5x: 120 x Rs 2.40 x 1.5 = Rs 432 Next 60 min at 2x: 60 x Rs 2.40 x 2 = Rs 288 Total OT Pay: Rs 432 + Rs 288 = Rs 720 |
| Overtime on a Holiday |
When an employee works on a public holiday, they get a higher OT rate.
Tankhwa Patra detects holidays from your holiday calendar automatically.
| Example: Employee works on Republic Day Monthly Gross: Rs 25,000 Per minute rate: Rs 2.00 Holiday OT Ratio: 3x Employee works 4 hours = 240 minutes Holiday OT Pay: 240 x Rs 2.00 x 3 = Rs 1,440 Added to salary automatically – no manual entry needed |
| Overtime on a Weekly Off Day |
When an employee works on their weekly off (Sunday or any off day), they get extra pay or a comp off.
The hrms attendance system detects the weekly off automatically from the shift roster.
| Example: Employee works on Sunday Monthly Gross: Rs 20,000 Per minute rate: Rs 1.60 Week Off OT Ratio: 2x Employee works full 8 hours = 480 minutes Week Off OT Pay: 480 x Rs 1.60 x 2 = Rs 1,536 OR – if Comp Off is configured: 1 comp-off day added to hrms leave management automatically OR – Configure Overtime as Off Extra Days Go to the overtime settings and select: Give Overtime As → Off Extra Days Once enabled, the system starts tracking overtime and converts it into leave according to the rules defined by the organization. |
| Frequently Asked Questions |
Q. What is the legal overtime rate in India?
Under the Factories Act, overtime must be paid at 2x (double) the normal rate. Under the Shops and Establishments Act, it varies by state – usually 1.5x to 2x. Tankhwa Patra hr management systems let you configure the correct ratio for your state and industry.
Q. How does Tankhwa Patra calculate overtime per minute?
By default, Tankhwa Patra human resource payroll software divides monthly gross by month days to get per day salary. Then divides by 480 minutes to get per minute rate. You can change these defaults by entering your own working days and shift minutes in the settings.
Q. What is the difference between Actual, SlotWise, and Round Off?
Actual counts exact minutes. SlotWise counts only full time slots – partial slots are not paid. Round Off rounds minutes to the nearest unit you set. Actual is most accurate. SlotWise is common in factories. Round Off gives a middle ground. All three are available in Tankhwa Patra hrms software.
Q. Can overtime be given as a day off instead of money?
Yes. In Tankhwa Patra, you can configure overtime as Compensatory Off. When overtime is worked, a comp-off day is automatically added to the employee hrms leave management balance. The employee can take this leave later. Popular in IT companies and offices.
Q. How does Tankhwa Patra handle overtime on holidays?
The hrms attendance system is connected to your holiday calendar. When an employee works on a declared holiday, the hr system software automatically identifies it and applies your holiday OT ratio. The pay is added to salary without any manual entry.
Q. Can different shifts have different overtime rates?
Yes. Tankhwa Patra hr management system software supports Shift Wise OT Ratio configuration. Morning, afternoon, and night shifts can each have a different ratio. Factory floor workers and office staff can also have different ratios – all managed in one hrm human resource management system.
Q. Is Tankhwa Patra suitable for small businesses?
Yes. Tankhwa Patra is the best hrms software for startups and small businesses. All overtime features – Actual, SlotWise, Round Off, holiday OT, week-off OT, comp-off – are included at one affordable price. Works for businesses with 10 to 500 employees.
| Conclusion |
Overtime calculation in India is not simple when you have different shifts, holidays, and weekly offs.
Manual Excel calculation takes hours and leads to errors every month.
Tankhwa Patra hrms solution sets it up once and runs automatically every month. You choose the method – Actual, SlotWise, or Round Off. You set the ratio – same, shift wise, or slab wise. You decide how to give it – cash, comp off, or extra days.
The human resource payroll software does the rest. Every month. Without errors.
Ready to Simplify Payroll and HR Operations?
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Disclaimer: The information provided is for general informational purposes only. It may vary over time, so we recommend verifying the details independently before making any decisions.
