Glossary
Overtime (OT) Calculation in India
Also known as: OT pay, extra hours
Overtime (OT) is the additional compensation owed when an employee works beyond the normal daily or weekly hours set by law or contract. In India, statutory overtime is generally paid at a premium rate, commonly twice the ordinary wage for covered workers. Accurate hour tracking is essential to calculate it correctly.
Overtime protects workers from being made to work excessive hours without extra reward. Once someone crosses the defined daily or weekly threshold, each additional hour is compensated at a higher rate than a normal hour, which also discourages employers from relying on unpaid overwork.
The mechanics depend on the applicable law and the worker's category. You need the ordinary wage rate, the threshold beyond which OT applies, and the premium multiplier. Getting any of these inputs wrong, or miscounting hours, leads to underpayment claims and compliance exposure.
For billable services teams, overtime has a double effect: it raises internal cost and may or may not be billable to the client depending on the contract. Distinguishing billable overtime from internal overtime requires session-level records rather than a single daily attendance flag.
India context
Indian law has long required overtime at a premium, historically twice the ordinary rate under the Factories Act and Minimum Wages Act; the Code on Wages, 2019 and OSH Code, 2020 continue an overtime premium (commonly cited as double the ordinary wage). The exact threshold and coverage depend on the worker category and applicable rules, so confirm against your establishment type.
How Workclave handles this
Workclave measures actual worked time from start and end of each session, so hours beyond the defined limit are identified rather than estimated. Because sessions are project-linked, you can separate billable overtime from internal overtime for both payroll and margin. billable hours leakage.
Related terms
Billable hours are the units of work time that can be charged to a client under a contract or engagement. They exclude internal activities like admin, training, or bench time that the client does not pay for. For services firms, billable hours are the direct link between effort and revenue.
Read definition →Compensatory off (comp off) is a paid day of leave an employee earns by working on a designated weekly off, national holiday, or festival holiday. Instead of overtime pay, the employee banks an equivalent day off to take later. It is a common way Indian IT firms and agencies balance project deadlines with rest entitlements.
Read definition →A shift roster is a schedule that assigns employees to specific shifts and working days over a period, such as a week or month. It ensures coverage for support, operations, or client time zones while distributing night and weekend duty fairly. The roster is the baseline that actual attendance is compared against.
Read definition →Payroll inputs are the data points fed into payroll each cycle to compute salaries, such as days present, leave taken, loss-of-pay days, overtime, and comp off. They convert attendance and policy into rupee amounts. Accurate inputs are the difference between correct and disputed salaries.
Read definition →