Construction Overtime Calculation Guide

Overtime is part of life on Indian construction sites—especially during slab castings, handovers, and rain-recovery weeks. But when your construction overtime calculation is inconsistent (wrong hours, wrong rate, no approvals), it quickly turns into wage disputes, inflated labour bills, and compliance risk.

India’s construction workforce is massive (industry reporting has put it around 71 million workers in 2023), so even small overtime errors—₹50 here, ₹100 there—scale into serious monthly leakage for contractors and builders. citeturn0search1

Quick takeaways

• Calculate overtime on net working hours (timestamps minus unpaid breaks).
• Convert daily/monthly/piece-rate wages into an ordinary hourly rate, then apply the overtime multiplier.
• Record approvals + reasons, so overtime is auditable and controllable.

What counts as overtime on a construction site?

In practical terms, overtime is the time a worker spends beyond your standard working hours (and/or beyond what the applicable law sets as normal hours). On real sites, confusion usually comes from:

• Long days for critical activities (pours, waterproofing, inspections)
• Weekly overflow from “just 1 extra hour” daily
• Night work or split shifts (early morning + evening)
• Sundays/holidays and emergency call-ins (often handled differently by policy)

India overtime rules (simple, practical overview)

Overtime rules depend on where and how the work is classified (factory/establishment/building & construction work), and the detailed rules can differ by state. Use this as a working overview and confirm applicability for your project.

Code on Wages: overtime is generally at least 2x

The Ministry of Labour & Employment’s FAQ for the Code on Wages states that overtime should be not less than twice the normal rate of wages. citeturn1search3

Factories Act: the common 9/48 threshold reference (where applicable)

For factory-type operations (for example, a precast yard or fabrication unit that meets the definition of a factory), Section 59 is often used as a reference point: overtime at twice the ordinary rate beyond 9 hours/day or 48 hours/week, and it discusses what goes into the “ordinary rate of wages”. citeturn0search2

OSHWC Code (2020): consolidated framework now shown as in force

The India Code listing shows the Occupational Safety, Health and Working Conditions Code, 2020 as in force with an enforcement date of 21-11-2025. citeturn3view0

Practical takeaway: don’t assume one “universal” overtime rule for every site. Set a clear OT policy aligned to your contract and applicable law, and keep records that match your policy.

Construction overtime calculation: step-by-step

This workflow keeps overtime consistent across trades, labour contractors, and projects.

Step 1: lock your standard hours and break rules

For each project/team, write down:

• Standard daily hours (for example, 8 or 9 net working hours)
• Standard weekly hours (often 48 hours/week)
• Paid vs unpaid breaks (for example, lunch unpaid)

Standardize this per labour contractor in the work order; otherwise each supervisor will apply their own rule.

Step 2: capture attendance as timestamps (IN/OUT)

Reliable overtime needs time-based attendance.

• Capture IN and OUT (and ideally break time)
• Support split shifts
• Tag the worker to trade + contractor

Step 3: calculate net working hours

For each worker-day:

• Total site hours = OUT - IN
• Net working hours = Total site hours - unpaid breaks

Example: IN 08:00, OUT 19:30, unpaid breaks 60 min → net 10.5 hours.

Step 4: compute overtime hours (daily + weekly, without double counting)

To avoid disputes, decide your logic upfront:

1. Daily overtime = max(0, net hours - standard daily hours)
2. Weekly overtime = max(0, weekly net hours - standard weekly hours)
3. Weekly top-up OT = max(0, weekly overtime - sum(daily overtime))

Payable overtime hours = sum(daily overtime) + weekly top-up OT.

This method respects both daily and weekly limits without paying the same extra hour twice.

Step 5: compute the ordinary hourly rate

Construction teams are paid in different ways, so convert everything to an hourly base.

Case A: Daily-wage workers

• Ordinary hourly rate = daily wage / standard daily hours

Case B: Monthly salary (staff, operators, some skilled trades)

Be consistent with your company’s method (many use 26 paid days/month):

• Daily rate = monthly wage / 26
• Ordinary hourly rate = daily rate / standard daily hours

Case C: Piece-rate work (bar bending per kg, plastering per sq ft)

Convert piece earnings to a time rate:

• Ordinary hourly rate = total piece earnings for the day / net working hours

Step 6: apply overtime multiplier and compute OT pay

If your policy/contract/applicable rule is “2x overtime”:

• Overtime rate = ordinary hourly rate × 2
• Overtime pay = overtime hours × overtime rate

Step 7: approvals + records (where most savings come from)

For each overtime entry, capture:

• Approver (site engineer/PM)
• Reason (pour, rework, inspection, shutdown recovery)
• Cost code (RCC, masonry, plumbing, finishes)

Practical overtime calculation examples (Indian site scenarios)

Example 1: Daily-wage mason during slab work

• Daily wage: ₹700
• Standard day: 9 hours
• Net hours: 11 hours

1. OT hours = 11 - 9 = 2
2. Hourly = 700/9 = ₹77.78
3. OT rate (2x) = ₹155.56
4. OT pay = 2 × ₹155.56 = ₹311.12 (round as per payroll rule)

Example 2: Electrician with weekly overtime

• Monthly wage: ₹20,800
• Standard day: 8 hours
• Standard week: 48 hours
• Week net hours: 52 hours

1. Weekly OT hours = 52 - 48 = 4
2. Daily rate (26-day) = ₹20,800/26 = ₹800
3. Hourly = ₹800/8 = ₹100
4. OT pay (2x) = 4 × (₹100 × 2) = ₹800

Example 3: Piece-rate bar bender on emergency call-in

• Rate: ₹7/kg
• Output: 900 kg → earnings ₹6,300
• Net hours: 10.5 hours
• Standard day: 9 hours

1. OT hours = 10.5 - 9 = 1.5
2. Hourly = ₹6,300/10.5 = ₹600
3. OT rate (2x) = ₹1,200
4. OT pay = 1.5 × ₹1,200 = ₹1,800

Common mistakes in construction overtime calculation

• Counting gross site hours instead of net working hours: unpaid breaks inflate OT.
• Double counting daily + weekly overtime: use the weekly top-up method.
• Flat OT payouts without hours: impossible to audit later.
• No pre-approval: overtime becomes routine, not exceptional.
• Inconsistent hourly conversion: different projects use different day counts.
• Wrong trade rate applied: skilled OT paid at helper rate (or vice versa).

Best practices to manage overtime (cost, productivity, safety)

Overtime isn’t “free acceleration”. Past a point, fatigue, rework, and safety incidents can cancel out the extra hours.

Plan overtime like a mini-schedule

Before you approve OT, confirm:

• Materials, drawings, scaffolding, and shuttering are ready
• The next-day dependency is real (inspection/pour/hand-over)
• You’re not paying OT to wait for concrete, pump, or hoist

Expect productivity loss on sustained long weeks

The Construction Industry Institute has highlighted that extended overtime schedules can reduce productivity and increase disruptions when sustained over time. citeturn11search3

Practical rule: if you’re routinely running 10–12 hour days for weeks, consider a second shift, adding crew strength, or removing constraints (materials, equipment, approvals) instead of piling on more OT.

Treat fatigue as a safety risk

OSHA notes that injury rates rise with longer shifts and during night work, and highlights higher risk at extended shift lengths. citeturn1search0

Factor in India’s heat stress reality

Heat exposure can reduce construction productivity; extended hours in peak heat increase fatigue and errors. A 2024 systematic review and meta-analysis found measurable productivity losses associated with occupational heat exposure among construction workers. citeturn11search7

Practical adjustments:

• Shift heavy work to early morning/evening
• Use split shifts with formal break tracking (so OT stays accurate)
• Plan hydration + shaded rest areas

Put overtime behind a simple approval gate

A lightweight control that works for SMB contractors:

• OT allowed only for defined activities (pour, inspection, shutdown recovery)
• OT must be approved before the shift ends
• OT must map to a cost code

Overtime register template (copy-friendly)

Use this table structure in a paper register or spreadsheet.

| Date | Project | Worker | Trade | Contractor | IN | OUT | Break (min) | Net hrs | OT hrs | Hourly rate (₹) | OT rate (₹) | OT amount (₹) | Approved by | |---|---|---|---|---|---|---|---:|---:|---:|---:|---:|---:|---| | 2026-01-22 | S1 | Raju | Mason | ABC Labour | 08:00 | 19:30 | 60 | 10.5 | 1.5 | 77.78 | 155.56 | 233.34 | Site Eng |

Where SiteSetu fits in (without changing your wage policy)

Overtime problems are usually messy inputs: attendance, breaks, approvals, and trade-wise rates.

If you already use SiteSetu for site reporting, you can strengthen overtime control by:

• Capturing worker-wise attendance with timestamps
• Standardizing trade rates and contractor crews
• Recording OT approvals linked to daily work (pour, rework, inspection)
• Exporting a consistent wage sheet for payroll

FAQs (quick answers)

Should overtime be calculated on basic wage or gross?

Many overtime definitions use the idea of an “ordinary rate of wages” (which can include certain allowances and exclude others). The Factories Act explanation of ordinary rate is a commonly referenced example. citeturn0search2

Do we count lunch and tea breaks in overtime?

Usually, only paid working time counts. If breaks are unpaid, exclude them from net working hours.

What if a worker does 1–2 hours extra daily for 6 days?

Weekly thresholds matter here. Use the “daily + weekly top-up” method to avoid double counting.

Final checklist for accurate construction overtime calculation

• Standardize daily/weekly hours and break rules
• Track IN/OUT timestamps (not only attendance status)
• Calculate net working hours first
• Avoid double counting (daily + weekly)
• Use a consistent hourly conversion for daily/monthly/piece-rate workers
• Require approvals and keep an overtime register

When overtime is calculated consistently, workers trust the wage process and your project labour cost stays under control.