Overtime Rules in India 2026: Pay, Hours & Compliance

Your engineer in Bengaluru worked eleven hours to ship a release. How many of those hours do you owe at double pay?

We have helped over 300 global companies hire, pay, and manage more than 2,000 employees in India without setting up a local business entity, and this question trips up first-time employers most. The answer depends on your office's rulebook, when the extra hours started, and who worked them.

What are the overtime rules in India in 2026?

Overtime in India is work beyond the prescribed daily or weekly hours, paid at twice the ordinary rate of wages. Section 27 of the Occupational Safety, Health and Working Conditions Code, 2020 sets that rate, requires the worker's consent, and counts overtime daily or weekly, whichever favours the worker.

The code took effect on 21 November 2025, and its Central Rules followed on 8 May 2026. Together they set this baseline.

India has no time-and-a-half tier, so every qualifying extra hour costs double, though state law still overrides some of these central numbers.

What are the legal working hours in India?

The legal working day in India is 8 hours of work and the legal week is 48 hours, under Section 25 of the OSH Code. Many state Shops and Establishments Acts still allow offices a 9-hour day, but every regime holds the 48-hour weekly ceiling.

Since 14 May 2026, no worker may work more than five hours at a stretch without a break. Four rules shape the working day:

• Rest interval: at least 30 minutes after five hours of continuous work, which is a break rather than working time.
• Spread-over: the span from first start to final finish, breaks included, usually capped between 10.5 and 12 hours by state law.
• Weekly rest: one full rest day a week, ordinarily Sunday, and no stretch of ten days without adequate rest.
• Night work: women may work night shifts in every type of establishment, with written consent and prescribed safety measures.

So an 8-hour day with a lunch break usually means about 8.5 hours on site.

Running round-the-clock rosters? Refer this guide to know more about staffing a 24/7 service desk team in India.

Working hours set the baseline, and overtime is everything a worker does beyond it.

Which law governs overtime in India now?

The OSH Code and the Code on Wages, 2019 now govern overtime in India. With two other codes, they replaced 29 central labour laws, including the Factories Act, 1948, so a policy that still cites it quotes a repealed law.

See this guide on the new labour codes in India for the wider rollout.

The catch is who the Central Rules bind: central-sphere establishments only, such as banking, insurance, mines, ports, railways, and multi-state operations. Everyone else follows state rules, and until those are notified, the old state Acts and caps apply.

So most private offices still answer overtime questions from a state Shops and Establishments Act. A few states have moved: Rajasthan notified OSH rules on 30 June 2026, and Uttar Pradesh final rules under all four codes in August 2026.

Karnataka amended its Shops and Commercial Establishments Act on 3 September 2026, but only on registration, appeals, and fines. Its 9-hour day stands.

Read more about labor laws in India for the state-by-state picture beyond overtime.

Check your sphere first, because it decides which caps and forms apply to you.

Who is eligible for overtime pay in India?

Any employee whose minimum rate of wages is fixed under the Code on Wages is eligible for overtime pay in India, including supervisors and managers. Job title no longer decides it. The Ministry of Labour and Employment confirmed this in its Additional FAQs on Labour Codes of 16 March 2026:

"Any employee, including workers, whose minimum rate of wages is fixed under the Wages Code, is eligible for overtime."

Three groups need a fresh look before your next payroll run:

• Non-supervisory staff: eligible as before, whether they work on a shop floor or at a desk.
• Supervisors and managers: eligible when a notified minimum wage covers their category, whatever their title.
• Contract workers: eligible, and the principal employer can end up paying if the contractor does not.

Eligibility hangs on wage schedules, so check the minimum wage in India for each role before you decide.

Treating senior engineers as exempt managers? Review that now, because the same logic drives contractor misclassification risk in India.

Test every role against the wage schedule, not the org chart.

How is overtime pay calculated in India?

Overtime pay in India is the hourly rate of ordinary wages, multiplied by two and by the overtime hours worked. For monthly paid staff, divide monthly wages by 26 to get the daily wage, then by 8 to get the hourly rate.

Overtime pay = (Basic + DA + retaining allowance) / 26 / 8 x 2 x overtime hours

The harder question is when the clock starts. The Ministry's March 2026 FAQs read the trigger as more than 8 hours in a day or 48 in a week. The Central Rules notified in May 2026 draw it more narrowly: 8 hours a day for daily-rated workers, and 48 hours a week for everyone else.

Section 27 still counts overtime on whichever basis favours the worker. The safer payroll setting is to pay from the ninth hour of a day or the 49th hour of a week, whichever gives more. Three rules then govern the inputs:

1. Round part hours up: 15 to 30 extra minutes counts as 30 minutes, and anything over 30 counts as a full hour.
2. Pay overtime in the same wage period in which it was earned.
3. Use ordinary wages as the code defines them, not total CTC.

The second rule catches companies whose approval workflow closes after payroll. See this guide on the payroll cycle in India to set the cut-off.

Worked example

Take an employee on monthly basic plus DA of about $610 (Rs 52,000) who works 3 hours 40 minutes of overtime in a month.

The result, about $24 (Rs 2,000), belongs in that month's payslip. For the Bengaluru engineer in the opening, Karnataka's 9-hour day applies, so two of the eleven hours are paid at double rate.

What counts as ordinary wages?

The Code on Wages sets one definition of wages with a floor: basic pay plus dearness allowance must be at least 50 percent of total remuneration. Where allowances exceed half, the excess counts as wages, so a low-basic structure no longer keeps overtime cheap.

If you are interested to know how that floor changes a CTC split, read how it reshapes salary structure in India.

A January 2026 Supreme Court judgment points the same way. In Union of India v. Heavy Vehicles Factory Employees' Union, the Court held that compensatory allowances such as HRA and transport allowance form part of the ordinary rate of wages for overtime under the Factories Act.

The ruling reads a repealed Act, not the OSH Code, so it is persuasive rather than binding. If you compute overtime on basic and DA alone, have that reviewed.

Overtime wages are excluded from the wage definition, so they do not raise provident fund or gratuity liability. For what does attract contributions, see PF, ESI and gratuity compliance. Overtime also stays outside the base for statutory bonus in India.

Get the trigger, the rounding, and the wage base right, and most overtime disputes never start.

How many overtime hours are allowed in a quarter in India?

Central-sphere establishments may allow no more than 144 overtime hours per worker in a quarter under the OSH (Central) Rules, 2026. State-sphere employers keep their existing state cap until their state notifies new rules, and those caps run from 50 to 125 hours a quarter.

The old Factories Act ceiling was 50 hours a quarter. These limits still apply where global teams often sit:

Before finalising a roster, check the working hours in Karnataka and the working hours in Maharashtra, home to two of the largest tech hubs.

Set an internal cap below the legal one, and track the total per employee per quarter rather than per month.

Anyone quoting a single national cap is skipping the transition, so plan to the cap for your sphere and state.

What overtime records must employers in India keep?

Central-sphere employers in India must keep an employee register, an attendance register, and a register of wages, overtime and deductions, in Forms XIII, XIV and XV under Rule 72 of the OSH Central Rules. Records may be electronic and must be kept for five years.

State-sphere employers use their state's forms, but the content is the same. Record failures are fined separately from wage failures, so keep these current:

• Employee and attendance registers showing hours actually worked, not hours scheduled.
• A wages and overtime register recording every overtime hour and the amount paid for it.
• Electronic wage slips, issued on or before payday.
• A written trail of the worker's consent and the manager's approval for each instance.

Refer this guide to know more about what a compliant salary slip in India must show.

The Ministry's Compliance Handbook for Employers lists every register and return in one place. For the rest of an inspection file, see this guide on statutory compliance in HR.

Is your team about to cross a headcount threshold? Read the compliance checklist after 10 employees next.

Accurate, tamper-evident registers are your best defence when an inspector asks about overtime.

What are the penalties for overtime violations in India?

Overtime violations in India attract fines under two codes. Underpaying overtime is a wage offence under the Code on Wages, while breaching hours, consent, or register rules falls under the OSH Code's general penalty of Rs 2 lakh to Rs 3 lakh.

That OSH Code fine alone works out to roughly $2,350 to $3,500 per contravention.

The codes allow an opportunity to comply before prosecution for several first offences, but that only helps if your registers show what happened.

Where a role was wrongly treated as exempt, employee misclassification penalties in India stack on top of wage arrears. If you are eager to see how overtime gaps surface alongside PF and TDS errors, read our guide to payroll compliance in India.

The cheapest penalty is the one a clean register prevents.

How do overtime rules apply to IT, shift, and factory teams?

The same overtime rules apply across sectors, but the risk shows up differently. Four patterns cause most disputes:

• IT and software services: on-call escalations and release nights. Remote schedules do not remove the duty to record actual hours.
• Manufacturing: longer hours are allowed only in exceptional cases the rules define, such as urgent repairs.
• Healthcare: round-the-clock rosters are hard to keep within limits without planned shift overlaps.
• Retail and hospitality: festive peaks push hours up, and work on a weekly rest day earns a compensatory day off as well as overtime pay.

Night shifts add a consent layer for women workers, and weekly rest days interact with your leave policy and holidays in India.

Whatever the sector, a written policy and an accurate register settle most inspections.

How do you build a compliant overtime policy in India?

A compliant overtime policy in India names who is eligible, when overtime starts, how it is approved, and when it is paid. From our experience, most disputes come from a policy never mapped to the statute. Five steps close that gap:

1. Map every role to its sphere and state, and check whether a notified minimum wage covers it.
2. Write the trigger down: overtime starts after 8 hours in a day or 48 in a week, on whichever basis pays the worker more.
3. Build consent and approval into the workflow, because the request trail is compliance evidence.
4. Set an internal quarterly cap below the legal ceiling for each state, and review it when a state notifies new rules.
5. Reconcile the overtime register to payroll before each wage period closes.

Your overtime section belongs in a wider handbook, so see this guide to HR policies in India for what it should sit beside.

The same attendance data drives deductions the other way. If you are interested to know how shortfalls are handled, read how loss of pay is calculated.

This guide reflects the rules as of September 2026, so review your policy whenever your state notifies new rules.

How can Wisemonk help you manage overtime compliance in India?

Wisemonk is an India-native Employer of Record (EOR). Having processed over $20 million in annual payroll, we run overtime compliance inside the monthly payroll cycle. Here is what that covers:

• Hiring and onboarding: We issue compliant employment contracts, run background checks, and set up each hire within days, with working hours and overtime terms written into the offer. Read more in our guide to hiring employees in India through an EOR.
• Payroll: We calculate salaries, overtime at twice the ordinary rate, TDS, and statutory deductions every month, and pay them inside the correct wage period. See this guide to India payroll deadlines.
• Benefits administration: We enrol employees in health insurance, administer PF, ESI, and gratuity, and answer coverage questions for your team directly. Read more about employee benefits in India.
• Statutory compliance: We keep attendance, overtime, and wage registers current, track state rule changes, and file statutory returns on time. See this guide on HR compliance in India.
• Contractor management: We draft compliant contractor agreements, pay contractors locally, and flag roles that should convert to employment. Read more on contractor vs employee in India.

Refer to our blogs for more detail on each of these services.

We have built a strong India EOR practice. We handle employment contracts, payroll, PF, ESI, gratuity, and state-level compliance ourselves, and we are planning to move into future markets including the US and the UK.

What do clients say about working with Wisemonk?

Two clients describe our payroll and compliance support.

"Red Hill Technology Solutions has run its India engineering team on Wisemonk for the past year and a half. They handle payroll and benefits end to end, so I can offer my employees good health insurance without having to master the idiosyncrasies of Indian benefits myself. Payroll cutoff reminders arrive every month before I need them, and off-cycle bonus runs have never been a problem. Even equipment purchasing, a real headache for a US company shipping to Indian addresses, is as simple as telling them what I need. Exchange rates are fair and the pricing is transparent. Deepika Elumalai, our point of contact, ties it all together. Whatever comes up, she pulls in the right people and sees it through. For any US company building a team in India, Wisemonk is an easy recommendation."
- Tak Yamamoto, President, Red Hill Technology Solutions, Inc.

"We came across Wisemonk and met with the CEO and staff to explain our situation, and were very impressed with their customer-focused approach to their business. Wisemonk onboarded all of my employees in one or two days. They paid my employees' salaries on the day after my payment cleared. Needless to say, my employees and I were very satisfied with their service then and remain so over a year later. We are an American company, so I was very happy to see that they have a US bank account where I can make ACH payments to minimize bank charges. All salary payments are timely. They worked directly with my employees to enroll them in the health care program and explain any coverage-related issues. The best part is that we get to work with a dedicated person assigned to our company. I would highly recommend Wisemonk and think of them as our Indian HR department."
- Frank Menes, Founder & CEO, Senem RFP

Both point to what overtime compliance depends on most: payroll that runs correctly and on time, every month.