1. What is Overtime Pay Calculation?

Overtime pay calculation in Malaysia follows the Employment Act 1955, which mandates that employees receive 1.5 times their hourly rate for overtime work beyond normal working hours.

2. How Does the Calculator Work?

The calculator uses the standard overtime formula:

Where:

• \( \text{Monthly Rate} \) — Employee's monthly salary in MYR
• \( 26 \) — Average number of working days per month
• \( 8 \) — Standard working hours per day
• \( \text{Overtime Hours} \) — Number of overtime hours worked
• \( 1.5 \) — Overtime multiplier as per Malaysian law

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 1.5 multiplier.

3. Importance of Overtime Calculation

Details: Accurate overtime calculation ensures compliance with Malaysian labor laws, prevents underpayment disputes, and helps both employers and employees understand rightful compensation for extra work hours.

4. Using the Calculator

Tips: Enter the monthly salary in MYR and the number of overtime hours worked. The calculator will compute the overtime pay according to Malaysian regulations for 2025.

5. Frequently Asked Questions (FAQ)

Q1: Is the 1.5 multiplier standard for all overtime in Malaysia?
A: Yes, according to the Employment Act 1955, overtime work must be paid at 1.5 times the hourly rate.

Q2: Why divide by 26 days?
A: 26 days is the standard calculation for average working days per month used in Malaysian payroll calculations.

Q3: Are there different rates for rest days or public holidays?
A: Yes, work on rest days is paid at 2.0 times the hourly rate, and public holidays at 3.0 times the hourly rate.

Q4: Is there a maximum limit for overtime hours?
A: Yes, the maximum overtime allowed is 104 hours per month under Malaysian law.

Q5: Does this calculation apply to all employees?
A: This applies to employees covered under the Employment Act 1955. Some categories of employees may have different arrangements.