How to Calculate Daily Wages & Overtime in India 2025 - Complete Guide

Introduction

Calculating daily wages and overtime for construction workers in India can be confusing. Different states have different minimum wage rates, overtime rules vary, and manual calculations lead to errors. This guide explains exactly how to calculate daily wages, overtime, half-days, and complete payroll for construction workers in India.

For proper wage documentation and compliance, contractors must maintain muster roll records as per BOCW Act requirements. Muster roll helps track daily wages, attendance, and ensures compliance with minimum wage laws.

Daily Wage Calculation Basics

Standard Daily Wage Formula

Daily Wage = Base Rate × Days Worked

Example:

• Base rate: ₹600/day
• Days worked: 26 days
• Total wage: ₹600 × 26 = ₹15,600

Understanding Base Rates

Base rates vary by:

• State minimum wage (varies by state)
• Skill level (unskilled, semi-skilled, skilled)
• Location (urban vs rural)
• Type of work (masonry, carpentry, etc.)

Overtime Calculation

Overtime Rate Formula

Overtime = (Daily Wage ÷ 8 hours) × Overtime Hours × 1.5

Example:

• Daily wage: ₹600
• Hours worked: 10 hours (2 hours overtime)
• Hourly rate: ₹600 ÷ 8 = ₹75/hour
• Overtime: ₹75 × 2 × 1.5 = ₹225
• Total for the day: ₹600 + ₹225 = ₹825

Overtime Rules by State

Different states have different overtime rules:

• Maharashtra: 1.5x for first 2 hours, 2x beyond
• Delhi: 1.5x for all overtime
• Karnataka: 1.5x standard rate

Half-Day Calculation

Half-Day Wage Formula

Half-Day = Daily Wage ÷ 2

Example:

• Daily wage: ₹600
• Half-day: ₹600 ÷ 2 = ₹300

Alternative (hourly):

• Daily wage: ₹600
• Hours: 4 hours
• Half-day: ₹600 ÷ 8 × 4 = ₹300

Complete Payroll Example

Weekly Payroll Calculation

Worker: Ram Kumar

• Base rate: ₹600/day
• Week 1:
  • Monday: Present (8 hours) = ₹600
  • Tuesday: Present + 2 hours OT = ₹600 + ₹225 = ₹825
  • Wednesday: Half-day (4 hours) = ₹300
  • Thursday: Present (8 hours) = ₹600
  • Friday: Present (8 hours) = ₹600
  • Saturday: Present (8 hours) = ₹600
  • Sunday: Absent = ₹0

Total Weekly Wage: ₹3,525

Common Calculation Mistakes

1. Forgetting Overtime: Not calculating overtime separately
2. Wrong Half-Day Formula: Using hourly rate incorrectly
3. Rate Confusion: Mixing daily and hourly rates
4. Rounding Errors: Incorrect rounding of amounts

Using Karyati for Automatic Calculation

Karyati automatically calculates:

• Daily wages from attendance
• Overtime based on hours worked
• Half-days correctly
• Weekly and monthly totals
• Advances and adjustments

No manual calculation needed - just mark attendance and wages are calculated automatically.

Conclusion

Calculating daily wages and overtime manually is error-prone and time-consuming. Use Karyati's automatic wage calculation to eliminate errors and save hours every week.