Step-by-Step Guide to Overtime Calculation for Professionals in Malaysia

PUBLISHED: Mar 25, 2026UPDATED: Sep 11, 20265 min read
Step-by-Step Guide to Overtime Calculation for Professionals in Malaysia

In this article

What Is Overtime Under Malaysian Labour Law?

Overtime (OT) under the Labour Law of Malaysia refers to the work that is done beyond the normal working hours as per the Employment Act of 1955. Generally, the standard working hours in Malaysia are 8 hours/day or 45 hours/week. Any hour worked beyond this limit qualifies for overtime pay, which has a higher pay rate than that paid on normal working days.This ensures that the employees are accurately paid for the extra work hour contributions and protects them from underpayment of any kind. The pay rates vary depending on when the extra hours are worked: normal working days, rest days, or public holidays.

What are Normal Working Hours and Overtime Pay? 

Malaysian Labour Law states that employees should not work more than 8 hours per day, their total working hours should not exceed 45 hours per week, and the employees are entitled to at least one rest day per week.

Overtime Pay

Overtime pay depends on when the extra work is performed:

Normal Working Days:

  • At least 1.5 times the normal hourly rate of pay.

Rest Days:

  • Work does not exceed half their normal hours of work: 0.5 times the normal hourly rate.
  • Work is more than half but does not exceed normal work hours: 1 time the normal hourly pay.
  • Beyond 8 hours: 2 times the normal hourly rate.

Public Holidays:

  • First 8 hours: 2 times the normal hourly rate.
  • Beyond 8 hours: 3 times the normal hourly rate.

Overtime Pay in Malaysia

Who Is Eligible for Overtime Pay in Malaysia? 

It is important to note that not every employee is directly eligible for overtime pay in Malaysia. As per rules, overtime applies to:

  • Manual labourers, supervisors of manual workers, and some domestic workers, regardless of their pay.
  • Employees earning RM4,000 or below per month.

For employees earning above this limit, the overtime terms applicable to them would be defined in their employment contracts instead.

How to do Overtime Calculation for Malaysian Professionals? 

Step 1: Ordinary Rate of Pay (ORP) Calculation:

For monthly-paid employees:

ORP = Monthly Salary ÷ 26 days

Hourly Rate = ORP ÷ Number of working hours per day

Step 2: Count Overtime Hours:

Calculate how many hours were worked beyond the actual work time (usually 8 hours).

Step 3: Apply Overtime Rate:

Determine overtime rate based on when it is done:

  • 1.5x → Normal days
  • 0.5x / 1x / 2x→ Rest days (company policy)
  • 2x / 3x → Public holidays (company policy)

Step 4: Calculate Overtime Pay:

Overtime Pay = Hourly Rate × Overtime Hours × Overtime Pay Rate

Example Calculation:

Say, monthly salary = RM2,600 and working hours = 8 hours/day,

  • Then ORP = RM2,600 ÷ 26 = RM100 per day,
  • Hourly rate = RM100 ÷ 8 = RM12.50 per hour,
  • For 2 hours of OT on a normal day,
  • Overtime pay = RM12.50 × 2 × 1.5 = RM37.50.

So, the employee earns RM37.50 for 2 hours of overtime on a normal day.

What is the Overtime Limit in Malaysia? 

The Employment Act of Malaysia ensures that the employees are not made to overwork, while also meeting the business’ operational demands. 

The General Rule is:

An employee’s overtime must not exceed 104 hours per month. 

This limit is imposed to maintain and protect the employees’ health, productivity, and work-life balance.
Note: Exceeding this limit without proper approval may result in serious non-compliance penalties. 

Conclusion: Manage Overtime Calculation Effectively 

Proper calculation of overtime pay is crucial to make sure that the employees are paid fairly. The employers should follow accurate records and calculation for OT to comply with the Malaysian Labour Law. This can also build trust between the employer and the employee, on financial terms.Although calculating the OT pay manually could easily lead to human errors, there is a digital solution that will easily manage records and calculations for multiple employees in different shifts: usage of reliable payroll software that is integrated with HR software, accounting software and time attendance software. Info-Tech is the best option for you to easily automate the process. Schedule a demo and stay compliant.

Overtime Calculation Malaysia FAQs

How to calculate OT pay in Malaysia?

OT Pay = Hourly Rate × OT Hours × OT Multiplier

Overtime is not fixed at one rate; it varies based on the day and situation. Both 1.5x and 2x are correct in different situations. In normal working days, its 1.5x and on rest days, its 2x for the first 8 hours of OT.

In Malaysia, salary calculation is neither strictly 22 days nor 30 days; it depends on the purpose. For OT calculations, 26 days must be considered for finding the ordinary rate of pay (ORP).

Overtime (OT) pay in Malaysia is not a fixed amount. It depends on your hourly rate and when the overtime is worked