How do I calculate overtime pay in Malaysia?
Work out the hourly rate: monthly salary divided by 26, then divided by 8 (or the normal hours a day). Overtime on a normal work day is 1.5 times the hourly rate. On a public holiday it is 2 times within normal hours and 3 times beyond them.
Who gets overtime under the Employment Act
Staff earning RM4,000 a month or less, and manual workers, drivers and supervisors of manual workers whatever their pay. Normal hours are up to 8 a day and 45 a week. Overtime is capped at 104 hours a month.
A worked example
Salary RM2,600. Daily rate: 2,600 ÷ 26 = RM100. Hourly rate: 100 ÷ 8 = RM12.50. Three hours of overtime on a work day: 3 × 12.50 × 1.5 = RM56.25.
Rest days and public holidays
Work on a rest day: up to half the normal hours earns half a day's pay, more than half earns a full day's pay, and hours beyond normal hours are paid at 2 times the hourly rate. On a public holiday, normal hours are paid at 2 times and extra hours at 3 times. Check the Employment Act and your contract for staff on shifts or monthly rates with other terms.
How Lucco Boss helps
Staff clock in on their phone in Lucco Boss, with the time taken from the server. Add the overtime amount to the month's payroll and Boss works out EPF, SOCSO, EIS and PCB on it. Payroll is free for up to 5 staff.
Updated · Lucco Technology