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Overtime Pay Formula:
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In Malaysia, overtime pay is calculated based on the Employment Act 1955. The standard formula uses the monthly salary, number of working days, and hours to determine the hourly rate, then applies a multiplier for overtime hours.
The calculator uses the standard formula:
Where:
Explanation: The formula first calculates the hourly rate by dividing the monthly salary by the total monthly working hours (26 days × 8 hours), then multiplies by overtime hours and the standard 1.5x multiplier.
Details: Accurate overtime calculation ensures compliance with Malaysian labor laws, proper employee compensation, and avoids legal disputes. It's essential for both employers and employees to understand how overtime pay is calculated.
Tips: Enter your monthly salary in MYR and the number of overtime hours worked. The calculator will compute your overtime pay based on Malaysian standards.
Q1: Why divide by 26 and then by 8?
A: This calculates the hourly rate based on 26 working days per month and 8 working hours per day, which is standard in Malaysia.
Q2: Is the 1.5 multiplier always applicable?
A: For normal working days, yes. Different multipliers apply for rest days (2.0x) and public holidays (3.0x) under Malaysian law.
Q3: Are there different calculations for different industries?
A: While the basic formula is standard, some industries may have specific provisions in their collective agreements.
Q4: What if I work on rest days or public holidays?
A: Different rates apply: 2.0x for rest days and 3.0x for public holidays for the first 8 hours, with higher rates beyond that.
Q5: Is this calculation applicable to all employees?
A: This applies to employees covered under the Employment Act 1955. Some categories like managers may have different arrangements.