All you need to know about overtime pay in Singapore: how to calculate it
There are times when employees often find themselves working additional hours or overtime. Your employer may ask you to work overtime to complete an assignment with a tight deadline, cover during a busy period, or help with an emergency.
Workplace policies should define the overtime hours your employer might expect and dictate the compensation you should receive. Legislation is in place to ensure fair treatment for employees and provide employers with clarity on the amount to pay employees for overtime.
Understanding your overtime eligibility and how to calculate your rightful compensation can ensure accurate payment. Read on to discover some aspects of overtime compensation. Here's what we'll cover:
- What do the regulations consider overtime?
- What's considered overtime hours?
- When should employers offer overtime pay?
- Who is eligible for overtime pay?
- How to calculate overtime pay in Singapore
- Overtime pay regulations in Singapore
- Conclusion
- FAQs
What do the regulations consider overtime?
Overtime pay is the extra money you receive when you do overtime work past your regular hours. Companies usually pay overtime at a fixed hourly rate, which they calculate based on your salary. You may qualify for overtime depending on your contract and regular weekly hours.
Its purpose is to offer fair compensation for your extra time and effort in completing your duties and your meaningful contribution to the company's operations. The overtime system protects the interests of employees and employers and creates a beneficial and impartial work environment.
In Singapore, employees eligible for overtime are non-workmen earning a monthly basic salary of $2,600 or less or workers earning a monthly basic salary of $4,500 or less.
Overtime rates typically come into effect after working the contractual hours, which are at most 44 hours per week.
However, there are legal restrictions on how much overtime an employee can undertake. According to the Ministry of Manpower, employees can work up to 72 hours of overtime per month, translating to a maximum of two or three hours per day.
Work on rest days or public holidays is not counted in the 72-hour overtime limit, except for work beyond the usual daily working hours. Only those extra hours are included in the 72-hour limit.
What's considered overtime hours?
According to Singapore's employment regulations, salaried employees are considered to be working overtime when they exceed eight hours per day or 45 hours per week, excluding breaks and meal times.
When should employers offer overtime pay?
Employers should pay employees overtime in the following circumstances:
Overtime pay on an average workday
Employees are entitled to receive standard overtime pay at a minimum rate of 1.5 times their hourly wage, regardless of whether they are paid daily or monthly. To determine your standard hourly rate, divide your monthly salary by 26 days and your total daily standard hours (typically eight).
Next, multiply your standard hourly rate by 1.5 to find your hourly overtime rate. Finally, multiply this rate by the overtime hours worked to calculate your overtime pay entitlement. This calculation method applies to all eligible employees entitled to overtime compensation.
Overtime pay on a public holiday
Employers are required to compensate employees at 1.5 the hourly rate for overtime worked on a public holiday. This holds regardless of the hourly, weekly, or monthly pay period.
The same rule applies if overtime is performed on a public holiday that coincides with a regular workday or a designated rest day. This calculation method applies to all employees eligible for overtime compensation.
Overtime pay on a rest day
If you work overtime on a rest day, not exceeding half your normal working hours (up to four hours), you should receive half a standard day's wage. You should receive a standard day's wage if you work on your rest day and exceed half your normal hours (between four and eight hours).
However, you should earn twice your ordinary rate for more than your standard (eight) daily work hours. This calculation method applies to all employees eligible for overtime compensation.
Who is eligible for overtime pay?
The Employment Act, which covers overtime regulations, applies to employees who fit the following overtime criteria:
- A non-workman earns a monthly basic salary of $2,600 or less.
- A workman earning a monthly basic salary of $4,500 or less
These criteria apply regardless of your employment status or whether your payment period is hourly, daily, or monthly. You should receive your overtime compensation in addition to your salary.
How to calculate overtime pay in Singapore
Numerous factors influence overtime payment procedures in Singapore
Additionally, regulations impose constraints on employees' maximum allowable hours of overtime work.
Here's a practical example:
Monthly salary: $SGD2600
Jie Qi's standard daily rate: $SGD2,600 / 26 days = $SGD100
Jie Qi's standard hourly rate: $SGD100 / 8 hours = $SGD12.50
If Jie Qi works overtime on a normal working day
Here's an illustration of Jie Qi's overtime compensation if she works beyond her regular hours on a standard workday:
Example: Jie Qi works an extra two hours on a regular workday outside her usual hours.
Her overtime hourly rate is:
$SGD12.50 x 1.5 = $SGD18.75
Her total overtime pay for that day is:
$SGD18.75 x 2 = $SGD37.50
If Jie Qi works overtime on a rest day
Jie Qi typically has rest days on weekends (Saturday and Sunday). Here's how they can calculate their overtime compensation for rest days in three different situations:
- Example 1: Jie Qi works four hours on a Sunday within normal working hours. Thus, they receive half a day's standard wage.
Their total payment for that rest day is:
$SGD100 / 2 = $SGD50
- Example 2: Jie Qi works eight hours on another full weekend, also within their usual working hours. Thus, they receive a full day's standard wage per day.
Their total payment for the two rest days is:
$SGD100 x 2 = $SGD200
- Example 3: Jie Qi works 11 hours on a Saturday, three hours beyond their standard working hours. They receive twice the original hourly rate for every additional hour they work outside their standard hours.
The total payment for this rest day is:
[$SGD12.50 x 8 hours] + [$SGD12.50 x 2 x 3 hours] = $SGD100 + $SGD75 = $SGD175
If Siti works overtime on a public holiday
Singapore's public holidays include Hari Raya Puasa or National Day festivities. The following examples show how Jie Qi can calculate their overtime for public holidays in two different situations:
- Example 1: Jie Qi works three hours on Hari Raya Puasa. This is within normal working days, so they receive double their hourly rate.
The total payment for that day is:
$SGD12.50 x 2 x 3 hours = $SGD75
- Example 2: Jie Qi works 13 hours on Eid al-Fitr. These hours extend beyond their usual work hours. Thus, their overtime rate per hour is three times the ordinary rate.
Total payment for this public holiday is:
[$SGD12.50 x 2 x 8] + [$SGD12.50 x 3 x 5] = $SGD200 + $SGD187.50 = $SGD387.50
Overtime pay regulations in Singapore
Singapore's Ministry of Manpower safeguards employee wages by establishing standard employment hours and overtime rate calculation methods. Here's a summary of the overtime regulations:
- Overtime Pay: For non-workmen earning up to SGD 2,600 and workers earning up to SGD 4,500, overtime pay is 1.5 times the hourly introductory pay rate. This is also applicable to employees whom the Employment Act does not cover.
- Overtime Hours: Under the Employment Act, employees should work 12 hours a day including overtime. If employees work beyond the official working hours (usually 44 hours a week), such work is considered overtime.
- Payment Time: Overtime pay should be paid within 14 days after the salary period in which the overtime work was done.
- Maximum Overtime: The maximum amount of overtime that an employee can work is capped at 72 hours per month.
Conclusion
By following the employment guidelines and calculation methods for overtime pay, workers can safeguard themselves against employers who miscalculate their pay or undercharge overtime rates.
Employees who work overtime should be compensated fairly, but also try to work within the standard working hours to prevent overstretching their limits. Ultimately, this motivates employees to work hard for the company.
FAQs
- What is the maximum number of hours that qualify for overtime pay?
Employees are eligible for overtime compensation if they work more than the contractual hours.
- Can salaried employees receive overtime pay?
Indeed, they can. As long as these employees satisfy the eligibility criteria for overtime pay, they can qualify for overtime compensation.
- Are there different overtime pay rates for weekends and holidays?
All the rates are the same for weekends and holidays.
- How do I count overtime pay for part-time employees?
The calculation method for overtime does not apply to part-time employees.
- Are overtime pay regulations the same across different industries?
Indeed, the regulations typically remain consistent regardless of the industry in which the employee is employed.
- What should I do if my employer refuses to pay overtime?
Consult your contract to verify your entitlements to payment. If your employer denies compensation, you can report an Employment Act violation.
- Is overtime compensation mandatory, or can employers choose not to offer it?
Adherence to mandates and compliance with overtime requirements.
