Guide · Attendance to payroll
Overtime and loss-of-pay (LOP) calculation — rules, day-count choices and examples
Statutory overtime in India is paid at twice the ordinary rate of wages for work beyond the daily hours fixed for the establishment or beyond 48 hours a week. Loss of pay is the salary for unpaid absent days: monthly salary divided by the day-count your policy fixes — calendar days, 30, or 26 working days — multiplied by the LOP days.
Automate OT & LOP · Payroll software
Overtime: the statutory rule
Under the Labour Codes in force since 21 November 2025 — as under the Factories Act before them — overtime is payable at twice the normal rate of wages when work exceeds the daily hours fixed for the establishment or 48 hours in a week. Daily working hours and overtime limits are prescribed by the appropriate government and can differ by state and category, so check the rules that apply to your establishment.
Example — overtime
Monthly wages ₹15,600, 26 working days, 8-hour shift. The employee works 6 overtime hours in the month.
| Step | Calculation | Result |
|---|---|---|
| Daily rate | 15,600 ÷ 26 | ₹600 |
| Ordinary hourly rate | 600 ÷ 8 | ₹75 |
| Overtime hourly rate | 2 × 75 | ₹150 |
| Overtime pay | 6 × 150 | ₹900 |
LOP: the day-count choice
No central law fixes the divisor for loss-of-pay. Employers choose one method, write it into policy and apply it consistently. The three common methods give different results.
| Method | Per-day salary | LOP for 2 days |
|---|---|---|
| Calendar days (31) | ₹967.74 | ₹1,935.48 |
| Fixed 30 days | ₹1,000.00 | ₹2,000.00 |
| Fixed 26 working days | ₹1,153.85 | ₹2,307.69 |
Mistakes that cause disputes
- Using one divisor for LOP and a different one for overtime without saying so in policy.
- Counting a weekly off or holiday between two absences as LOP without a sandwich-leave rule in policy.
- Paying overtime on basic only when the applicable definition of wages is wider.
- Pro-rating the PF ceiling for LOP — the ceiling is not reduced; see PF and ESIC calculation.
In JobMyIndia
Overtime is calculated from punches against the employee's shift in attendance and paid through payroll; you can require approval before it is paid. LOP comes from the monthly attendance register after leave and regularisations are applied, using calendar days — or working days for categories whose weekly offs are unpaid — as configured in payroll settings.
Frequently asked questions
Is overtime paid on basic or on gross?
Statute refers to the ordinary rate of wages, which is defined by the applicable law and may include more than basic. Check the definition that applies to your establishment.
Which LOP method is correct?
Any consistent method written into your policy or appointment terms. Calendar-day LOP is common in offices; 26-day LOP is common in factories.