Overtime pay is one of the most common payroll issues in Singapore, especially for employees covered under Section 4 of the Employment Act, which sets specific rules on how overtime is defined and compensated for workmen earning up to SGD 4,500 a month and non-workmen earning up to SGD 2,600.
So, how is overtime calculated, and what should businesses keep in mind when processing payroll in Singapore?
Key Takeaways
• Overtime pay in Singapore is generally calculated at 1.5 times the employee’s hourly basic rate of pay.
• Employees covered under Part IV of the Employment Act are entitled to overtime pay when they work beyond their prescribed working hours.
• Overtime rules vary depending on whether the work is performed on a normal workday, rest day, or public holiday.
• Using an automated payroll and attendance system helps businesses calculate overtime accurately and remain compliant with MOM regulations.
Understanding overtime pay
Overtime refers to any work performed beyond normal contractual hours, excluding meal breaks.The basic formula for overtime pay is:
1.5 × hourly rate × number of overtime hours worked
But there are important details to note, from eligibility rules to day types, and caps on the total number of overtime hours.
Who qualifies for overtime pay?
- Workmen earning up to $4,500 monthly
- Non-workmen earning up to $2,600 every month
Overtime pay on a regular work day
On a normal working day, overtime is paid at 1.5 times the standard hourly rate. However, the calculation is based on the weekly total, not daily. Employees are only entitled to overtime if they exceed 44 hours per week.
Working hours can also be averaged over two weeks (or three weeks for shift workers with 12-hour days). For example, if someone works 45 hours in the first week but 40 in the next, their average is 42.5 hours — which means no overtime pay is due.
Take note that overtime pay is capped at 72 hours per month.
Overtime pay on a public holiday
If an employee works on a public holiday, they can get:
- Their usual day’s salary and an extra full day’s pay
- Overtime pay at 1.5 times the hourly rate if they work more than their regular daily hours
When the holiday falls on a rest day, rest day pay applies. On top of that, an employee is also given a day off in lieu. If the employer does not grant another day off, the employee must instead receive an extra full day’s salary.
Overtime pay on a rest day
When an employee works on their rest day, different rules apply:
- If they work less than half of their usual daily hours, they receive one full day’s salary.
- They receive two full days’ salary by working more than half of their usual daily hours.
- Working beyond their normal daily hours makes them eligible to receive two full days’ salary plus overtime at 1.5 times their hourly rate.
Here’s a quick look at the rates based on when the employee worked:
| Employee worked less than half the normal day’s hours | Employee worked more than half the normal day’s hours | Overtime (beyond normal hours) | |
| Normal workday | Normal day’s pay | Normal day’s pay | 1.5× hourly rate |
| Public holiday (workday) | Normal day’s pay + extra full day’s pay | Normal day’s pay + extra full day’s pay | 1.5× hourly rate |
| Rest day | Rest day pay + half day’s pay | Rest day pay + full day’s pay | 1.5× hourly rate |
| Public holiday on rest day | Another day off or one day’s pay in lieu | Another day off or one day’s pay in lieu | 1.5× hourly rate |
Let’s simplify calculating and paying overtime
Adaptive Pay comes with an attendance module that works seamlessly with its payroll system for Singapore businesses. Employees can clock in through a mobile or web app, and their hours are recorded instantly. Any approved overtime is captured automatically, so managers don’t have to track it separately.
With everything stored securely in a cloud-based HRMS, businesses can reduce errors and save time, as well as ensure their compliance with employment regulations.
Frequently Asked Questions
1. Who is eligible for overtime pay in Singapore?
Employees covered under Part IV of the Employment Act, including eligible workmen and non-workmen within the applicable salary thresholds, are generally entitled to overtime pay when they work beyond their prescribed working hours.
2. How is overtime pay calculated?
Overtime is generally paid at 1.5 times the employee’s hourly basic rate of pay for eligible overtime hours. The calculation is based on the Employment Act and the employee’s basic salary.
3. Is overtime calculated using gross salary?
No. Overtime calculations are based on the employee’s basic rate of pay, not gross salary. Allowances, bonuses, and other variable payments are generally not included unless specified otherwise.
4. What is the maximum overtime allowed in Singapore?
Under the Employment Act, overtime is generally capped at 72 hours per month, unless an exemption has been granted by the Ministry of Manpower.
Find out more about how Adaptive Pay can simplify payroll in Singapore.
Request a demo today or email us at info@adaptivepay.com.sg to get started.
