Calculation of Monthly Salary to Hourly in India

Eight Hours Work Daily in India: Some media sources said that the Central Government has planned to increase the daily working hours from 8 to 12. In factories the shift hour to allow to increase 12-hour shifts for 6 days (48 hours) for six days per week (72 hours).

Also read: How to calculate per day salary in India?

Factory Working Hours in India: Normal working hours in Govt factories are 44.75 hours/week with 8 hours a day from Monday to Friday and 4.75 hrs on a Saturday.

Overtime Calculation for One hour in India: The overtime is paid in Government factories as per the formula given below:

Basic Salary + Dearness Allowance + Transport allowance + House Rent Allowance divide by 200 for each hour of overtime worked.

Per Hour = [BP+DA+HRA+TA / 200]

Also check: How to Calculate Basic Salary in India?

What says Factories Act 1948, Section 59?

The Factories Act clearly says that the worker works in a factory for more than nine hours in any day or for more than forty-eight hours in any week, he shall, in respect to overtime work, be entitled to wages at the rate of twice his ordinary rate of wages.

59. Extra wages for overtime:-

(1) Where a worker works in a factory for more than nine hours in any day or for more than forty-eight hours in any week, he shall, in respect to overtime work, be entitled to wages at the rate of twice his ordinary rate of wages.

(2) For the purposes of subsection (1), “ordinary rate of wages” means the basic wages plus such allowances, including the cash equivalent of the advantage accruing through the concessional sale to workers of foodgrains and other articles, as the worker is for the time being entitled to, but does not include a bonus and wages for overtime work.

(3) Where any workers in a factory are paid on a piece-rate basis, the time rate shall be deemed to be equivalent to the daily average of their full-time earnings for the days on which they actually worked on the same or identical job during the month immediately preceding the calendar month during which the overtime work was done, and such time rates shall be deemed to be the ordinary rates of wages of those workers.

Provided that in the case of a worker who has not worked in the immediately preceding calendar month on the same or identical job, the time rate shall be deemed to be equivalent to the daily average of the earning of the worker for the days on which he actually worked in the week in which the overtime work was done.

Explanation:- For the purposes of this sub-section, in computing the earnings for the days on which the worker actually worked such allowances, including the cash equivalent of the advantage accruing through the concessional sale to workers of foodgrains and other articles, as the worker is for the time being entitled to, shall be included but any bonus or wages for overtime work payable in relation to the period with reference to which the earnings are being computed shall be excluded.]

(4) The cash equivalent of the advantage accruing through the concessional sale to a worker of foodgrains and other articles shall be computed as often as may be prescribed on the basis of the maximum quantity of foodgrains and other articles admissible to a standard family.

Explanation 1.-” Standard family” means a family consisting of the worker, his or her spouse and two children below the age of fourteen years requiring in all three adult consumption units.

Explanation 2:- “Adult consumption unit” means the consumption unit of a male above the age of fourteen years; and the consumption unit of a female above the age of fourteen years and that of a child below the age of fourteen years shall be calculated at the rates of 0.8 and 0.6 respectively of one adult consumption unit.

(5) The State Government may make rules prescribing-

(a) the manner in which the cash equivalent of the advantage accruing through the concessional sale to a worker of foodgrains and other articles shall be computed; and

(b) the registers that shall be maintained in a factory for the purpose of securing compliance with the provisions of this section.]

OVERTIME CALCULATION (FOR ORDNANCE EMPLOYEES)

OVERTIME HOURS: If an employee works for more than 44.75 hours in a week, the Extra hours will be treated as Overtime Hours.

Example- 1: Suppose a Worker worked as follows in a Week.

Hence his Overtime hours are: 51.75 – 44.75 = 7 hrs. OT Bonus – 7 hours OT Single – 8 hours DOT – Nil

Example- 2: Suppose a Worker worked as follows in a Week.

• OT Bonus – 6 hours OT Single – 9.25 hours DOT – 4.25 hours

Example- 3: Suppose a Worker worked as follows in a Week.

• OT Bonus – 5 hours OT Single – 16.25 hours DOT – 4.25 hours

The method of working overtime hours is same for both day workers and piece workers.

DAY WORKERS OVER TIME CALCULATION FORMULA: Over Time Pay = BP + GP / 200 Over Time Bonus = BP + GP + 2(DA + HRA) / 200 Departmental Over Time = DA + TA / 200

PIECE WORK SYSTEM OVER TIME CALCULATION FORMULA: Over Time Pay = BP + GP / 200 Over Time Pay = MINIMUM OF THE SCALE / 200 Over Time Bonus = 1.25 (BP + GP) + 2 (DA + HRA) / 200