Factory Act 1934

Overtime Calculator Pakistan

Pakistan's labour laws require overtime at 2x the ordinary hourly rate for work beyond 48 hours per week. Use this reference to check factory, shop and commercial establishment rosters.

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The Formula

1. Hourly rate = Monthly basic / (Weekly hours × 4.33) (most common: monthly basic / 208 for a 48-hour week) 2. Overtime rate = 2 × Hourly rate 3. Overtime pay = Overtime hours × Overtime rate

Alternative: some Pakistani employers use 'basic / 26 / 8' — daily basic over 8 hours — as the hourly rate. Check what your standing orders or appointment letters specify.

Worked Example

Example: Operator on PKR 41,600 monthly basic, 10 overtime hours in a week

Monthly basicPKR 41,600
Hourly rate (basic / 208)PKR 200
Overtime rate (2x)PKR 400/hour
Overtime hours in the week10
Overtime pay for the week = 10 × 400 = PKR 4,000

The 48-hour threshold

For factory workers under the Factories Act 1934 the normal week is 48 hours (9 hours/day max). For shops and commercial establishments under provincial Shops Ordinances, the limit is similar. Any time beyond this threshold counts as overtime and must be paid at double the ordinary rate. The Factories Act also caps total hours at 60 per week (including overtime) for adult workers and prohibits overtime entirely for workers under 18.

Who is entitled to overtime?

'Workers' as defined in the Factories Act, Shops and Establishments Ordinance, and covered under the Industrial and Commercial Employment (Standing Orders) Ordinance 1968 are entitled. Managerial and supervisory roles are generally excluded. Contract workers engaged through third-party contractors are entitled under the Contract Labour rules — the principal employer shares responsibility. Interns, apprentices under the Apprenticeship Ordinance, and domestic workers have separate rules.

Night shifts and Sunday work

Night-shift allowances are not mandatory in federal law but many employers pay them per CBA or policy (commonly 15–25% of basic). Work on the weekly rest day (Sunday, or Friday in some workplaces) is typically compensated with a substituted rest day within three days — or paid as overtime at 2x. Always check your provincial rules as provinces have devolved labour legislation: Punjab Shops and Establishments Ordinance 1969, Sindh Shops and Establishments Act 2015, and the KPK and Balochistan equivalents each have slightly different limits.

How EOBI, PESSI and SESSI interact with overtime

Overtime pay is treated as wages for EOBI contributions (the 6% employer + 1% employee split applies to overtime as well as basic). PESSI (Punjab) and SESSI (Sindh) social security contributions follow the same rule — the contribution is calculated on total wages including overtime, up to the ceiling. This is commonly overlooked in manual payroll and can cause short-contribution notices from the institutions.

Factories Act record-keeping requirements

Section 60 of the Factories Act 1934 requires every factory to maintain a register of adult workers showing the daily hours worked, including a separate column for overtime. Provincial Labour Inspectors can demand this register on visit and non-maintenance is a compoundable offence under Section 62. An electronic attendance system (biometric, RFID, mobile punch) satisfies the requirement if the data is exportable on demand.

Automating overtime in Peoplifi

Peoplifi combines ZKTeco biometric punches with your shift roster, computes weekly worked hours, identifies hours beyond 48, and applies 2x automatically — with optional night and Sunday multipliers on top. Overtime feeds payroll and FBR tax recalculation in the same run, and generates the Section-60-compliant register as an Excel export.

Frequently Asked Questions

What is the overtime rate in Pakistan?

2x the ordinary rate of pay — usually 2x the basic hourly rate — for hours beyond 48 per week, under Section 47 of the Factories Act 1934 and the corresponding provincial Shops Ordinances.

Is overtime based on basic or gross?

Law says ordinary rate (basic + dearness/COL, no bonuses). Most Pakistani employers use basic for simplicity, which is slightly worker-unfavourable but commonly accepted in standing orders.

Are managers entitled to overtime?

Generally no. Managerial and supervisory staff are excluded under Section 2 of the Standing Orders Ordinance. Workers, clerical staff, and non-supervisory employees are covered.

What's the maximum overtime per week in Pakistan?

Total weekly hours including overtime cannot exceed 60 for adults under the Factories Act. Workers under 18 cannot work overtime at all. Pregnant women cannot work overtime during the 10 weeks around maternity.

Is overtime taxable in Pakistan?

Yes. Overtime is included in total salary for FBR income tax under Section 149 withholding. It's taxed at the same slab rate as your basic. Peoplifi recomputes the monthly tax withholding on the higher gross automatically.

Is Friday / Sunday work automatically overtime?

No. Work on the weekly rest day is compensated either by a substituted rest day within 3 days, or as overtime at 2x. Some CBAs push this to 3x for rest-day work — check your own agreement.

How do I calculate overtime for a daily-wage worker?

Take the daily wage, divide by 8 to get the hourly rate (for an 8-hour day) or by 9 (for a 9-hour day), then multiply overtime hours by 2x that hourly rate. Add the result to the daily wage for total pay.

Do banks and call centres follow the same 48-hour rule?

Commercial establishments fall under provincial Shops and Establishments Ordinances, which set the same 48-hour weekly threshold. The State Bank also has specific circulars for bank employees around rest days and overtime, which override the generic provincial rule for scheduled banks.

Skip the spreadsheets

Peoplifi runs these calculations automatically for every employee, every pay cycle — with FBR, EOBI and bank-sheet exports included.

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