How to Calculate Overtime Pay in Singapore

 

Overtime pay is one of the most common payroll issues in Singapore, especially for employees covered under Section 4 of the Employment Act, which sets specific rules on how overtime is defined and compensated for workmen earning up to SGD 4,500 a month and non-workmen earning up to SGD 2,600.

So, how is overtime calculated, and what should businesses keep in mind when processing payroll in Singapore?

Understanding overtime pay

Overtime refers to any work performed beyond normal contractual hours, excluding meal breaks.
The basic formula for overtime pay is:

1.5 × hourly rate × number of overtime hours worked

But there are important details to note, from eligibility rules to day types, and caps on the total number of overtime hours.

Who qualifies for overtime pay?

·     Workmen earning up to $4,500 monthly

·     Non-workmen earning up to $2,600 every month

Overtime pay on a regular work day

On a normal working day, overtime is paid at 1.5 times the standard hourly rate. However, the calculation is based on the weekly total, not daily. Employees are only entitled to overtime if they exceed 44 hours per week.

Working hours can also be averaged over two weeks (or three weeks for shift workers with 12-hour days). For example, if someone works 45 hours in the first week but 40 in the next, their average is 42.5 hours — which means no overtime pay is due.

Take note that overtime pay is capped at 72 hours per month.

Overtime pay on a public holiday

If an employee works on a public holiday, they can get:

·     Their usual day’s salary and an extra full day’s pay

·     Overtime pay at 1.5 times the hourly rate if they work more than their regular daily hours

When the holiday falls on a rest day, rest day pay applies. On top of that, an employee is also given a day off in lieu. If the employer does not grant another day off, the employee must instead receive an extra full day’s salary.

Overtime pay on a rest day

When an employee works on their rest day, different rules apply:

·     If they work less than half of their usual daily hours, they receive one full day’s salary.

·     They receive two full days’ salary by working more than half of their usual daily hours.

·     Working beyond their normal daily hours makes them eligible to receive two full days’ salary plus overtime at 1.5 times their hourly rate.

Here’s a quick look at the rates based on when the employee worked:

	Employee worked less than half the normal day’s hours	Employee worked more than half the normal day’s hours	Overtime (beyond normal hours)
Normal workday	Normal day’s pay	Normal day’s pay	1.5× hourly rate
Public holiday (workday)	Normal day’s pay + extra full day’s pay	Normal day’s pay + extra full day’s pay	1.5× hourly rate
Rest day	Rest day pay + half day’s pay	Rest day pay + full day’s pay	1.5× hourly rate
Public holiday on rest day	Another day off or one day’s pay in lieu	Another day off or one day’s pay in lieu	1.5× hourly rate

Let’s simplify calculating and paying overtime.

Adaptive Pay comes with an attendance module that works seamlessly with its payroll system for Singapore businesses. Employees can clock in through a mobile or web app, and their hours are recorded instantly. Any approved overtime is captured automatically, so managers don’t have to track it separately.

With everything stored securely in a cloud-based HRMS, businesses can reduce errors and save time, as well as ensure their compliance with employment regulations.

Find out more about how Adaptive Pay can simplify payroll in Singapore. Request a demo today or email us at info@adaptivepay.com.sg to get started.

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