How To Calculate Overtime Pay For Your Employees During The Month

Calculate overtime pay for employees in Singapore

Employees in Singapore work some of the longest hours. In MOM’s Labour Market Report 3Q2022, employees in Singapore worked 43.7 paid hours per week on average. On top of this, they worked 2.3 paid hours of overtime.

The number of paid overtime hours have been on a steady decline over the past 10 years. On average, employees are working 1.3 hours less paid overtime today compared to 2013.

Part IV of the Singapore Employment Act stipulates that certain employees who work beyond 44 hours per week must be paid overtime pay – regardless of what their employment contract may say.

Read Also: Singapore Employment Act: 10 Statutory Requirements To Pay Employees

Which Employees Are Entitled To Overtime Pay In Singapore?

Part IV of Singapore’s Employment Act only applies to:

#1 Workmen who do not earn more than $4,500 a month. Workmen are generally those who do manual labour, such as cleaner, construction worker, machine operator, train, bus lorry and van drivers, and others. 

#2 Most employees (other than workmen or those employed in a managerial or an executive position) who do not earn more than $2,600 a month

The salary caps on each employee type exclude overtime pay, bonus, annual wage supplements (i.e. 13th month bonus), productivity incentive payments and any other allowance. Overtime pay is applicable for full-time and part-time employees, as well as other types of employees.

This also means employees not protected by Part IV of the Employment Act are not entitled to any overtime pay, regardless of how long they may work. Of course, to provide fairer or more competitive remuneration, employers are free to provide overtime pay via employment contracts. Similarly, employees can ensure they are treated fairly with regards to overtime work within their employment contracts.

Read Also: Minimum Requirements For Key Employment Terms (KETs) On Employees Contracts

What Is Considered (Or Not Considered) Overtime Work?

Employees protected under Part IV of the Employment Act typically have normal working hours of up to 8 to 9 hours per day or 44 hours per week. Any work done beyond this limit is legally considered overtime hours.

If such employees work:Contractual Hours (Limit Set By Employment Act)
5 days or less a weekUp to 9 hours a day or 44 hours a week
More than 5 days a weekUp to 8 hours a day or 44 hours a week

Employers are required to provide employees with details on the number of hours they work within their payslips. This is to reduce instances of disputes as well as provide employees with a clear record of their overtime hours.

Each month, employees are only allowed to work up to 72 overtime hours. Each day, employees are also not permitted to work beyond 12 hours unless there is:

  • an accident or threat of accident.
  • work that is essential to the life of the community, national defence or security.
  • urgent work to be done to machinery or plant.
  • an interruption of work that was impossible to foresee.

Employers may apply for exemptions if they require their employees to work more than this cap on overtime hours. According to MOM, certain higher-risk job roles will not be granted this exemption.

Overtime work is also separate from working on rest days and working on public holidays. This means any work done on rest days and public holidays does not count towards the 72-hour limit on overtime work each month.

Read Also: 12 Things Employers Need To Include In An Itemised Payslip

How Much Should Employees Be Paid For Overtime Work?

Employees who work overtime should be paid at least 1.5 times their hourly basic rate of pay. Again, employers can offer more to make the remuneration more compelling. Employers CANNOT substitute overtime pay with time off. This is to encourage employers to ensure proper labour scheduling and provide employees with fair wages for longer hours.

The “hourly basic rate of pay” can generally be calculated as:

(12 X Monthly Basic Rate of pay)

——————————————–

(52 X 44)

The numerator is an employee’s yearly wage. The denominator breaks this wage down into an hourly figure by dividing 52 weeks multiplied by the 44 hours a week cap.

While part-time employees are also entitled to overtime pay, the calculation differs slightly from full-time employees.  For part-time employees, any overtime work done beyond their part-time hours BUT up to a full-time employee’s normal working hours can be paid at their hourly basic rate of pay. Only if part-time employees work beyond the normal working hours of a full-time employee, will they be paid 1.5 times their hourly basic rate of pay.

For example, a part-time employee is supposed to work 4 hours a day, while full-time employees work 8 hours a day. If the part-time employee ends up working 10 hours a day, the individual will be entitled to: (4 hours X hourly basic rate of pay) + (4 overtime hours X hourly basic rate of pay) + (2 overtime hours X 1.5 times hourly basic rate of pay). Only the hours beyond the full-time working hours need to paid at 1.5 times the hourly basic rate of pay.

Employers and employees can use this MOM overtime pay calculator to find out how much overtime pay is due. Again, employers are free to offer a higher amount for work done beyond normal part-time hours.

Unlike normal wages, which must be paid within seven days after the last day of the salary period, overtime pay must be paid within 14 days of the last day of the salary period.

Read Also: Part-Time Employment Regulations: 10 Things To Know When Hiring A Part-Timer

Do Employers Need To Pay CPF For Overtime Pay?

Employers need to pay CPF contributions for overtime pay. However, overtime pay may be considered either Ordinary Wage (OW) or Additional Wage (AW), depending on when wages are due to be paid.

If the overtime pay for a particular month is payable by the 14th of the following month, then it will be considered Ordinary Wage (OW). However, if the overtime pay for a particular month is payable after the 14th of the following month or tabulated along with the following month’s pay, then it should be considered as Additional Wage (AW).

Read Also: Ordinary Wage (OW) VS Additional Wage (AW): What’s The Difference (And Why It Matters To Employers And Employees)

This article was first published on 14 July 2022 and updated.

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