Overtime Pay in India
Last updated: 13 July 2026. General explainer, not legal or tax advice.
At a glance
The double rate rule
Overtime is the pay for hours worked beyond the normal limit, and Indian law sets it at twice the ordinary wage rate. The rule runs through the Factories Act for factories, the state Shops and Establishments Acts for other workplaces, and the labour codes, which restate the double rate for extra hours.
Hour limits and caps
The point at which overtime begins, and how much of it is allowed, comes from the daily and weekly hour limits and the overtime caps in these laws. There are also limits on how long a working day may be spread. Because the numbers differ by law and by state, the applicable limit has to be read from the rule that covers the workplace.
Who is covered
Overtime protection is aimed mainly at workers and many non managerial staff. The new labour codes widen the definition of a worker to pull in some supervisory roles, so the set of people who can claim overtime is broader than it used to be.
Records decide overtime disputes
Overtime is rate sensitive and dispute prone, and almost every dispute turns on the record of hours. A clean attendance log, tied to the muster roll, is what lets an employer show the extra hours were counted and paid correctly.
Common overtime mistakes
The usual errors are practical rather than legal. Overtime gets paid at the plain hourly rate instead of double, or it is folded into a flat allowance that hides whether the double rate was met, or the hours are estimated from memory rather than a record. Any of these turns a routine payment into a dispute if an inspector or an employee questions it.
The fix is a clean hours record and a simple rule, double the ordinary rate for the extra hours, applied the same way every time. When the log ties to the muster roll, the overtime figure defends itself.
Worked example
Take a worker whose ordinary wage works out to 100 rupees an hour. Overtime is paid at twice that, so 200 rupees an hour. Eight hours of overtime in a month therefore adds 1,600 rupees to the pay for that month, on top of the normal wage.
Related terms
Frequently asked questions
What is the overtime rate in India?
Twice the ordinary wage rate for the extra hours worked, as set by the Factories Act, the state Shops and Establishments Acts, and the labour codes.
Is every employee eligible for overtime?
Overtime mainly covers workers and non managerial staff. The new labour codes widen the worker definition to include some supervisory roles.
When does overtime start?
Past the daily or weekly hour limit set by the law that covers the workplace. The exact limit and the overtime cap depend on the Act and the state.
How do I calculate overtime correctly?
Start from an accurate record of hours, apply the normal daily or weekly limit, and pay the excess at twice the regular rate.
What records matter for overtime?
The attendance log and the muster roll. Overtime disputes almost always turn on whether the extra hours were recorded, so clean data is the defence.
Can I pay overtime as a fixed allowance?
A flat allowance is risky if it hides whether the double rate was actually met. Paying twice the ordinary rate on recorded extra hours is cleaner and easier to defend.
What is the most common overtime mistake?
Paying the plain hourly rate instead of double, or estimating hours rather than working from a record tied to the muster roll.
Sources and official references
The rules and figures on this page trace to the official sources below. Statutory amounts and dates change, so confirm the current number on the source before you act on it.
How Offrd helps
Offrd tracks attendance and work days through Atndnz, so the hours behind an overtime calculation are recorded, not guessed.