Hisab Pagar
Key points
- Calculate the hourly rate from the wage arrangement you use.
- Record overtime hours and late arrivals separately.
- Check deductions against the rules that apply before reducing pay.
Overtime and late arrivals are where a fixed salary meets a real working day. Staff stay back to finish an order; someone comes in forty minutes late for the third time this week. Both affect pay, and both cause disputes when the rule is not clear. This guide shows how to work out an hourly rate, pay overtime correctly, and keep late fines fair, with examples in rupees.
Step 1: Find the ordinary hourly rate
Overtime is paid per hour, so you first need the person’s normal rate for one hour of work.
| Pay type | Ordinary hourly rate | Example |
|---|---|---|
| Monthly | Monthly salary ÷ days in the month ÷ hours in a normal day | ₹15,000 ÷ 30 ÷ 8 = ₹62.50 |
| Daily | Daily wage ÷ hours in a normal day | ₹600 ÷ 8 = ₹75 |
| Weekly | Weekly wage ÷ 7 ÷ hours in a normal day | ₹3,500 ÷ 7 ÷ 8 = ₹62.50 |
| Hourly | The hourly rate itself | ₹80 |
For monthly staff some businesses divide by 26 working days instead of the days in the month; that gives a higher hourly rate (₹15,000 ÷ 26 ÷ 8 = ₹72.12). As with salary, pick one method and use it every month. The salary calculation guide explains the difference.
Step 2: Decide the overtime rate
Overtime is usually paid at a multiple of the ordinary rate. What you must pay depends on the law that covers your business:
- The Factories Act and the Code on Wages set overtime at twice the ordinary rate of wages for the workers they cover.
- Shops, restaurants and offices are covered by their state’s Shops and Establishments Act, which sets its own limits on working hours and its own overtime rate.
If one of these laws applies to you, use the legal rate. Many very small businesses agree a flat rate per hour with staff instead; whatever you do, agree it in advance and write it down.
Step 3: Count overtime hours carefully
Overtime is time worked beyond the normal day. Write it down on the day, next to that day’s attendance, in hours (half hours are fine). Do not wait until the end of the month to remember who stayed late on which day.
Overtime for a monthly-paid worker
Ramesh earns ₹15,000 a month for an 8-hour day. In September 2026 (30 days) he worked 2 extra hours on 5 days: 10 overtime hours. His attendance earned him ₹13,500 (22 present days, 2 half days, 4 paid Sundays).
At the double rate his earnings for the month are ₹13,500 + ₹1,250 = ₹14,750.
Overtime for a daily-wage worker
Sunita earns ₹600 for an 8-hour day, so her ordinary hourly rate is ₹75. Ten overtime hours at twice the rate is 10 × ₹150 = ₹1,500; at 1.5 times it is 10 × ₹112.50 = ₹1,125.
Late fines: keep them small, clear and rare
A late fine is meant to change a habit, not to cut wages. Before you apply one:
- Set a grace period, for example 10 or 15 minutes after opening time. Traffic happens.
- Fix the rule in advance, such as “₹50 for each day more than 15 minutes late”, and tell everyone. Put it up on the wall.
- Mark it on the day. Note “late” in the register when it happens, so there is no argument at month-end about which days.
- Show it separately on the salary slip, as its own line, not hidden inside the salary.
Know the limits. Indian wage law regulates fines. Under the Payment of Wages Act and the Code on Wages, a fine can generally only be imposed for acts or omissions listed in a notice approved by the authorities and displayed at the workplace, after giving the worker a chance to explain, and the total of fines in a wage period cannot be more than 3% of the wages for that period. Treat this as general information and check what applies to your business.
Overtime and late fine together
Continuing Ramesh’s month: his late fine is ₹50 a day and he was late on 3 days.
The fine is about 1% of his wages, well inside the 3% limit. If he had taken advances during the month, they would be subtracted from ₹14,600 to get the amount still to pay.
Late arrival or half day?
If someone arrives very late, for example after lunch, it is usually fairer and simpler to mark a half day than to apply a fine. Decide the cut-off (say, more than two hours late is a half day), write it down, and apply it the same way to everyone.
Common mistakes
- Paying overtime at the ordinary rate. If a law covers your business, it almost certainly sets a higher rate.
- Overtime from memory. Write the hours on the day.
- Fining for every minute. Per-minute deductions feel petty and are hard to check. A grace period and a fixed amount per late day work better.
- Different rules for different people. Whatever the rule is, apply it to everyone.
How Hisab Pagar handles overtime and late fines
- When marking attendance you can add overtime hours to any day and flag the person as late on a present or half day.
- In each staff member’s details, set an overtime rate per hour and a late fine per late day. To pay overtime at twice the rate in the example, enter ₹125.
- If you leave the overtime rate empty, Hisab Pagar uses 1.5 times an hourly rate worked out on an 8-hour day (for monthly staff, salary ÷ days in the month ÷ 8; for hourly staff, 1.5 times their rate). That is ₹937.50 for Ramesh’s 10 hours. If you need to pay twice the rate, or your normal day is longer than 8 hours, enter your own overtime rate.
- The late fine is charged only for days marked late, and is deducted after overtime is added and the total is rounded to the nearest rupee. With a ₹125 overtime rate, Ramesh’s September shows ₹14,600 earned, exactly as above.
- The salary slip and the monthly register show overtime hours, late days and the fine on their own lines.
