Overtime Calculator — India, Factories Act & Shops Act
In brief
Pick your Act and state, enter team size and average hours per day. You get total OT wage liability for the period, the correct multiplier for your state, and a warning if the projection breaches the Factories Act Section 65(3)(iv) quarterly cap — before it becomes a Section 92 offence.
Overtime pay in India = hours above 9/day or 48/week x 2 x ordinary hourly wage under the Factories Act, 1948 (Section 51, Section 54, and Section 59). The Shops & Establishments Act covers offices, shops, and commercial establishments, with the multiplier set by each state — Karnataka, Maharashtra, Tamil Nadu, and Delhi all prescribe 2x; the rest default to 1.5x. Quarterly OT is capped at 50 hours per worker under the Factories Act Section 65(3)(iv) for factories operating under special exemption, with state variations (Karnataka 75; Maharashtra up to 115 with prior approval).
OT hours / employee
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OT hours (team)
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Multiplier
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OT wage liability
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Projected quarterly OT exceeds the Factories Act Section 65(3)(iv) cap of 50 hours per worker. Exceeding this without prior state-government approval is an offence under Section 92.
Karnataka, Maharashtra, Tamil Nadu, and Delhi Shops Acts prescribe 2x. Other states default to 1.5x — confirm against your state's current notification.
Factories Act vs Shops & Establishments Acts
The Factories Act, 1948 governs registered factories — generally any premises with 10+ workers using power, or 20+ workers without power. OT is mandatory at 2x ordinary wages above 9 hours/day (Section 54) or 48 hours/week (Section 51), at the rate fixed by Section 59. The Section 65(3)(iv) quarterly cap of 50 hours per worker applies to factories under special exemption — Karnataka raises this to 75 by state amendment; Maharashtra allows up to 115 with prior approval.
The Shops & Establishments Act is state-specific and covers offices, shops, restaurants, and other commercial establishments. The OT multiplier ranges from 1.5x (some legacy states) to 2x (Karnataka, Maharashtra, Tamil Nadu, Delhi). Always check your state's current notification — the rules have been updated in many states since 2020.
How to use this calculator
- Pick the applicable Act. Factories Act for manufacturing units registered under it; Shops & Establishments Act for offices, shops, restaurants, and other commercial establishments. The Act determines the OT multiplier and the quarterly cap rules.
- Pick your state. State drives the Shops Act multiplier (Karnataka, Maharashtra, Tamil Nadu, Delhi all prescribe 2x; default 1.5x elsewhere) and adds state-specific notes for Factories Act calculations.
- Enter team and shift details. Number of employees, standard daily hours (typically 8) and weekly hours (typically 48). These set the threshold above which OT begins.
- Enter actual hours and wage. Average actual hours per day per employee, days worked in the period (typically 26 for a month), and the ordinary hourly wage in rupees. For Indian SMBs, ₹150/hour ≈ ₹26,000 monthly basic ÷ 26 days ÷ 8 hours.
- Read the OT estimate. You get per-employee OT hours, team OT hours, the multiplier applied, and total OT wage liability for the period. The Factories Act quarterly-cap warning fires if the per-employee projection exceeds 50 hours per quarter.
Frequently asked questions
How is overtime calculated under the Factories Act?
Section 59 of the Factories Act, 1948 mandates that any work above 9 hours in a day (Section 54) or 48 hours in a week (Section 51) is overtime, paid at twice the ordinary rate of wages. 'Ordinary wages' includes basic + DA + retaining allowance but excludes bonus, gratuity, HRA, and the employer's PF and ESI contributions.
What's the OT rate under Shops & Establishments Acts?
Shops & Establishments Acts are state laws and rates vary. Most states default to 2x ordinary wages: Karnataka, Maharashtra, Tamil Nadu, and Delhi all prescribe 2x. A few states historically allowed 1.5x but are converging on 2x. Check your state's gazette or notification for the exact rule.
Is there a maximum OT limit per quarter in India?
Yes — the Factories Act Section 65(3)(iv) caps total OT at 50 hours per worker per quarter for factories operating under special exemption. Karnataka rules permit up to 75 hours under exemption; Maharashtra permits up to 115 hours with prior state-government approval. Exceeding the cap without approval is an offence under Section 92.
Does overtime apply to managerial / supervisory employees?
Under the Factories Act, OT does not apply to persons holding 'a position of supervision or management' as defined in Section 64(2)(a). Most Shops & Establishments Acts also set an earnings threshold above which OT rules do not apply — the threshold varies by state and has been revised over time. Confirm against your state's current notification.
How do I calculate OT for a 6-day work week?
For a 6-day week (most Indian SMBs and factories), the standard daily limit is 8 hours and weekly limit is 48 hours. Anything over 9 hours in a day or 48 hours in a week is OT under the Factories Act. The seventh day must be a paid weekly off — work on the weekly off is OT under Section 52 read with Section 59.
Are OT hours taxable separately?
OT wages are part of salary income under Section 17(1) of the Income Tax Act and taxed at the employee's slab rate. They attract TDS just like regular salary. They also count toward EPF and ESI contribution wages. There is no separate concessional rate for OT income.
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