HR Calculate OT – 4 Must Know Rules to Stay Fully Labor Law Compliant

How to Calculate Overtime (OT) Without Violating Labor Laws

Overtime (OT) is compensation that employers must pay to employees who work beyond the regular working hours defined by labor law. However, paying OT correctly is crucial to avoid legal disputes and ensure fairness for both employers and employees.

What is Overtime (OT)?

Overtime refers to the additional pay an employer must provide when an employee works beyond their standard working hours. Employers must adhere to specific guidelines to ensure compliance with labor laws.

Guidelines for Paying Overtime Under Labor Law

The Thai Labor Protection Act (1998) requires employers to pay overtime to employees working beyond regular working hours. The conditions are as follows:

1. Salaried Employees or Monthly Employees

Salaried employees are those who receive a fixed salary. Overtime is calculated based on the employee’s hourly wage. In total, they must not exceed 36 hours of overtime per week, including holidays.

• Normal working hours: 8 hours per day and up to 48 hours per week
• Special sectors: For high-risk jobs (e.g., underground work, underwater work, radiation exposure, etc.), working hours must not exceed 7 hours per day or 42 hours per week
• Break time: At least 1 hour per day after working no more than 5 continuous hours
• Overtime breaks: If working overtime for at least 2 hours, the employee must receive a break of at least 20 minutes before starting the overtime

Overtime Calculation for Regular Days

If an employee works beyond regular hours on a weekday, the employer must pay at least 1.5 times the hourly wage for the overtime hours worked.

Example Calculation:

An employee earns a monthly salary of 15,000 THB, working 8 hours per day and 30 days per month.

• Hourly wage = 15,000 ÷ 30 ÷ 8 = 62.5 THB per hour
• Overtime pay = 62.5 × 1.5 = 93.75 THB per hour

Overtime on Holidays

If an employee works on a holiday or outside their regular work schedule, the employer must pay at least 2 times the hourly wage.

Example Calculation:

For the same employee:

• Hourly wage = 62.5 THB per hour
• Holiday overtime = 62.5 × 2 = 125 THB per hour

Overtime Beyond Regular Hours

For overtime that exceeds regular hours, the employer must pay at least 3 times the employee’s hourly wage.

Example Calculation: For the same employee:

1. Overtime pay = 62.5 × 3 = 187.50 THB per hour  

Daily Employees

Daily employees receive pay based on the actual days they work.

Overtime for Regular Days

If they work overtime, the employer must pay 1.5 times the normal hourly wage.

Example Calculation:

An employee earns 400 THB per day, working 8 hours per day.

• Hourly wage = 400 ÷ 8 = 50 THB per hour
• Overtime pay = 50 × 1.5 = 75 THB per hour

Overtime on Holidays

For overtime on a holiday, the employer must pay 2 times the normal hourly wage.

Example Calculation:

For the same employee:

• Hourly wage = 50 THB per hour
• Holiday overtime = 50 × 2 = 100 THB per hour

Overtime Beyond Regular Hours

If overtime exceeds normal hours on a holiday, the employer must pay 3 times the normal hourly rate.

Example Calculation:

For the same employee:

Overtime pay = 50 × 3 = 150 THB per hour

Employer Responsibilities Regarding Overtime

1. Employee consent Employers cannot require employees to work overtime without their consent, except in emergency situations
2. Timely payment: Overtime must be paid correctly and promptly. Employers are prohibited from substituting overtime payments with time off
3. Accurate time recording: Employers should maintain transparent systems for tracking work hours to avoid disputes
4. Compliance: Failing to comply with overtime payment regulations can result in fines or legal action against the employer