Easy OT Calculation in Thailand

How to Calculate Overtime (OT)

In working life, it’s impossible that our work will always be completed exactly within the planned time 100% of the time. Therefore, working overtime, or OT, occurs. Working overtime means working beyond or exceeding the regular working hours, which are typically set at 8 hours per day. Some employers may set a limit of not more than 12 hours per day, but not exceeding 48 hours per week. Even if our employees are already on a fixed salary,

if overtime work occurs, the company must pay them for this additional work. In calculating OT, there are important multipliers, which are 1.5, 2, and 3. These numbers indicate the multiple of the wage rate. Labor laws dictate that for overtime work on a regular day, employers must pay 1.5 times the regular wage rate to employees.

However, if the overtime work is during a weekly holiday, public holiday, or annual leave, the payment must be double.

Normally, OT pay is calculated by HR or specialists, calculated together with the salary and paid according to the company’s payroll cycle. But in some companies, Payroll + OT calculation is not done by HR or specialists. So how can we be sure that our overtime work (OT) is calculated correctly? In this article, we will share with you how to calculate OT. If you are ready, let’s get started

Calculating Overtime (OT) for Permanent Employees

For a normal Working Day

Example:

Mr. A, with a monthly salary of 21,000 THB, works from 08:00 to 17:00 on Monday (a regular working day) and also does 3 hours of overtime. Therefore, the calculation method is as follows:

Step 1:

Calculate Mr. A’s hourly wage by dividing the monthly salary by 30 days to find the daily wage, and then divide the result by 8 hours to find the hourly wage.

Formula: Monthly Salary / 30 / 8 = 21,000 / 30 / 8 = 87.5 THB per hour

Step 2:

Multiply the hourly wage by 1.5 to find out how much the wage for one overtime hour would be.

87.5 THB * 1.5 = 131.25 THB per hour

Calculating Overtime (OT) for Public Holidays or Weekly Off-Days

Before we look at the examples, let’s clarify that an employee’s monthly salary usually includes the overall monthly compensation, including payment for holidays. This means that if an employee works on a weekly off-day, public holiday, or annual leave, during regular working hours (e.g., 08:00-17:00), they will receive an additional overtime pay of only 1 times the normal rate (in reality, it’s 2 times, but one of these is already included in the monthly salary).

For overtime hours outside the regular working hours, like 17:00-21:00, the employee will receive 3 times the wage. This triple rate comes from the fact that on a regular day, overtime pay is 1.5 times the normal rate. Therefore, on a holiday, it should be increased by another 1.5 times, making it 1.5 times normal overtime rate multiplied by 2, which equals 3 times the rate.

Example:

Mr. B, with a monthly salary of 21,000 THB, works from 08:00 to 20:00 on Sunday (a weekly off-day) and does 3 hours of overtime. The calculation is divided into two parts: calculating OT for regular working hours and calculating OT for extra working hours, as follows:

1. Calculating OT for Regular Working Hours

Mr. B’s regular working hours are from 08:00-17:00. During this time, he will receive an additional 1 times the normal hourly rate, calculated from the daily wage of 700 THB (87.5 THB/hour * 8 hours). However, for the hours from 17:00-20:00, we calculate the overtime pay for extra hours.

2. Calculating OT for Extra Working Hours

Step 1:

Calculate Mr. B’s hourly wage by dividing the monthly salary by 30 days to find the daily wage, and then divide the result by 8 hours to find the hourly wage.

Formula: Monthly Salary / 30 / 8 = 21,000/30/8 = 87.5 THB per hour

Step 2:

Multiply the hourly wage by 3 to find out the wage for one hour of OT on a holiday.

87.5 THB * 3 = 262.5 THB per hour

Step 3:

Multiply the overtime hourly wage by the number of overtime hours worked (17:00-20:00).

262.5 THB * 3 hours = 787.5 THB

Therefore, for that month, the company must pay Mr. B a total salary of 21,000 + 700 + 787.5 = 22,487.5 THB.

Summary

In calculating OT for employees, it can be divided into two categories:

• Calculating OT on regular working days
• Calculating OT on holidays

Both methods are similar, differing only in the multiplier used. For calculating OT for regular employees on working days, employers must pay an additional 1.5 times the wage rate for overtime hours worked.

On holidays, employers must pay 1 times the wage rate for regular working hours and 3 times for hours beyond the regular time. The method for calculating OT for daily wage employees is similar to that for monthly wage employees, where employers must pay an additional 1.5 times on working days and 2 times on holidays, both during regular and extra working hours.

Therefore, those responsible for calculating OT must regularly check the information to ensure that employees’ salaries are correct. Often, errors in OT calculation can lead to complications and require corrections each month.

To help ease the burden of salary and OT calculations and prevent errors, you can contact RLC Outsourcing. We are ready to assist you in driving your organization forward

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