Guide to Overtime Calculations in Malaysia

Overtime in Malaysia is regulated under the Employment Act 1955, which sets out employee working hours, overtime eligibility, and minimum overtime pay rates.

Employees are entitled to overtime compensation if they work:

• More than 8 hours in a day, or
• More than 45 hours in a week

Any work beyond these limits must be compensated according to statutory overtime rates.

Overtime pay is calculated at 1.5 times the employee’s normal hourly rate for work performed beyond the standard working hours on a normal workday.

Employees can also earn different rates of overtime if they work on rest days or public holidays.

Note that only employees earning less than RM 4,000 per month are allowed to receive overtime.

Overtime is generally voluntary unless stated otherwise in the employment contract. Employers should obtain employee consent before requiring overtime work.

However, it is important to accurately calculate overtime compensation for employee payroll. Incorrect overtime payments can lead to fines up to RM 50,000.