Overtime pay calculation Malaysia is one of those things everybody has an opinion on and almost nobody has looked up. The office version is usually a number somebody heard at a previous job. Aiyo, just multiply by one and a half lah — roughly right, but it is the wrong half of the sum. The multiplier is the easy part. What decides the money is the number you multiply.
The rules are shorter than you would think: a handful of subsections in Part XII of the Employment Act 1955, one two-line regulation from 1980 that sets the monthly ceiling, and one line in the First Schedule that decides whether any of it reaches you. This page is Peninsular Malaysia and the Federal Territory of Labuan, because that is where the Act applies; Sabah and Sarawak get their own section at the end.
Quick Answer: 1.5 times your hourly rate on a normal working day, 2 times on a rest day, 3 times on a public holiday — where the hourly rate is your monthly wage divided by 26, then divided by your normal hours in a day.
- The line that decides everything: wages exceeding RM 4,000 a month, and you are not a manual worker. Above it, the statutory overtime rate stops applying.
- The number nobody expects: 26. Not the days you actually worked.
- The ceiling: 104 hours of overtime in any one month — and rest days and public holidays are not counted towards it.
Table of Contents
Who is covered45-hour weekHourly rateFirst, whether the overtime rules reach you at all
Since 1 January 2023 the Employment Act covers every person who has entered into a contract of service. First Schedule paragraph 1 says exactly that, with no wage ceiling and nothing in the not-applicable column. That is where most summaries stop — and it is where they go wrong, because the next paragraph puts a line back in.
Paragraph 1A disapplies five sets of provisions to a person whose wages exceed RM 4,000 a month: subsections 60(3), 60A(3), 60C(2A), 60D(3) and 60D(4), and section 60J. Left to right, that is rest-day pay, the overtime rate, the shift allowance power, public-holiday pay and termination benefits. JTKSM puts it plainly on its own labour-case page: above RM 4,000, except manual workers, there is no claim for overtime pay, rest-day pay, public-holiday pay, shift allowance or termination benefits.
Two things there repay a close read. Paragraph 1A names only those subsections — the hours limits in subsection 60A(1), the ceiling in subsection 60A(4), the twelve-hour bar in subsection 60A(7), the rest day in section 59 and the holiday entitlement in subsection 60D(1) are not in the column. The line takes away the rates, not the limits. And paragraph 3 says the wages tested exclude commissions, subsistence allowance and overtime payment, so a low base with high commission can sit under RM 4,000 when the payslip total does not look like it.
Three groups sit outside the line altogether. Paragraph 2 keeps the Act applying in full irrespective of the amount of wages to anyone in manual labour, anyone operating a vehicle carrying passengers or goods for reward, and anyone supervising manual workers throughout their work. The other way, the First Schedule disapplies sections 60, 60A, 60D and 60I to a domestic employee, and subsection 60A(8) takes section 60A out of play for work involving long hours of inactive or stand-by employment.
Forty-five hours a week, and what counts as an hour
Overtime only exists above a normal day, so the normal day has to be pinned first. Subsection 60A(1) sets four limits at once: no more than five consecutive hours without at least 30 minutes of leisure; no more than eight hours in one day; not in excess of a spread over period of ten hours in one day; and no more than 45 hours in one week. Above all of that sits one wall: except in the five emergency situations listed in paragraphs 60A(2)(a) to (e), no employer shall require any employee under any circumstances to work more than 12 hours in any one day.
The 45-hour week arrived on 1 January 2023 with the Employment (Amendment) Act 2022, and JTKSM’s notice says it covers normal and shift hours alike. Two department answers are worth having in writing: an employer may not reduce wages because of the move from 48 hours to 45, and the 45 hours exclude rest time provided the employee is genuinely free to use that time and his own movements.
What counts as an hour is defined too. Hours of work means the time during which an employee is at the disposal of the employer and is not free to dispose of his own time and movements. Normal hours of work means the hours agreed in the contract as the usual hours per day, within the subsection 60A(1) limits — a contractual number, bounded by the Act, and the number the whole calculation hangs on.
The hourly rate: divide by 26, then by your normal day
Section 60I is the engine. The ordinary rate of pay is the wages you are entitled to under your contract for the normal hours of work for one day, excluding approved incentive payments and payment for work on a rest day or public holiday. The hourly rate of pay is that ordinary rate divided by the normal hours of work. And for a monthly-paid employee, subsection 60I(1A) fixes the ordinary rate by formula: monthly rate of pay divided by 26.
It matters that this applies here. Section 60I opens with for the purposes of this Part and Part IX, and it sits in Part XII alongside sections 59, 60, 60A and 60D — the overtime sections are in the same Part as the definition, so 26 is not an analogy, it is the rule. That is the difference from a retrenchment benefit, where section 60J sits in its own Part XIIA: see 👉 Retrenchment Compensation Malaysia: The Formula.
You do not have to take our word for the arithmetic: JTKSM publishes its own overtime estimator and the code behind it is readable. It fixes the month at 26 working days, derives the hourly rate as monthly salary divided by 26 and then by the normal hours per day, and multiplies by 1.5, 2 and 3. The department prints a disclaimer with it — an estimated calculation only, not an authority for a claim.
Illustration only — not a prediction for anyone
| Monthly wage | Ordinary rate, divided by 26 | Hourly rate, on an 8-hour day | Normal day, 1.5x | Rest day, 2x | Public holiday, 3x |
|---|---|---|---|---|---|
| RM 1,700 | RM 65.38 | RM 8.17 | RM 12.26 | RM 16.35 | RM 24.52 |
| RM 2,600 | RM 100.00 | RM 12.50 | RM 18.75 | RM 25.00 | RM 37.50 |
Read the RM 2,600 row across and 3 hours of overtime on an ordinary working day is 3 × RM 18.75 = RM 56.25. Now change one thing. Shorten the normal day to 7.5 hours, the shape a six-day week at 45 hours gives you, and the hourly rate becomes RM 2,600 ÷ 26 ÷ 7.5 = RM 13.33, with the 1.5 rate at RM 20.00. Stretch it to 9 hours and it is RM 11.11 and RM 16.67. A shorter contractual day does not cut your overtime rate. It raises it.
1.5 on a working day, 2 on a rest day, 3 on a public holiday
An ordinary working day is the simple one: for overtime in excess of the normal hours of work, not less than one and a half times the hourly rate of pay, irrespective of how your rate of pay is fixed. Plus one trap. If any work is carried out after the ten-hour spread over period, the whole period from the moment that spread over ends until you stop for the day is deemed overtime, not only the hours past your normal eight.
Rest days and public holidays are not one rate but two payments, and this is where most homemade calculations go wrong: there is what the day pays, and then there is a separate rate for the hours beyond the normal day.
| Day worked | Up to half the normal hours | More than half, up to the normal hours | Beyond the normal hours |
|---|---|---|---|
| Rest day, monthly or weekly rate | Half the ordinary rate of pay | One day’s wages at the ordinary rate | Not less than 2 times the hourly rate |
| Rest day, daily or hourly rate | One day’s wages at the ordinary rate | 2 days’ wages at the ordinary rate | Not less than 2 times the hourly rate |
| Paid public holiday, monthly, weekly, daily or hourly rate | 2 days’ wages at the ordinary rate, on top of the holiday pay, however short the day | Same — the length of the day does not change it | Not less than 3 times the hourly rate |
On the RM 2,600 illustration: on a rest day, up to 4 hours pays half the ordinary rate, RM 50; more than 4 but not beyond the normal 8 pays one day’s wages, RM 100; hours past 8 are RM 25.00 each. On a paid public holiday, being made to come in at all pays 2 days’ wages at the ordinary rate — RM 200 — on top of the holiday pay, however short the day, plus RM 37.50 an hour beyond the normal hours.
The 104-hour ceiling, and the two days that do not count
The ceiling is not in the Act. Paragraph 60A(4)(a) says no employer shall require or permit an employee to work overtime exceeding such limit as the Minister prescribes by regulations, and the regulations are two lines long: the Employment (Limitation of Overtime Work) Regulations 1980 set the limit at a total of 104 hours in any one month, unchanged since the 1991 amendment in force from 17 October 1991.
Then read the proviso, because it surprises people in both directions. Work carried out on a rest day, on a gazetted public holiday referred to in subsection 60D(1), or on a paid holiday substituted for one shall not be construed as overtime work for the purposes of that subsection. Those hours are still paid at the rest-day and public-holiday rates — the proviso is about the ceiling, not the money. But they do not fill up your 104 hours, so a month can look enormous and still sit inside the limit. The Director General may also permit overtime above the limit on a written application, with 30 days to appeal to the Minister.
When it has to be paid, and what the employer must keep
Overtime runs on its own clock. Subsection 19(1) requires wages not later than the 7th day after the last day of a wage period, but subsection 19(2) carves out wages for work on a rest day, on a gazetted public holiday, and overtime under section 60A: those are payable not later than the last day of the next wage period. So overtime arriving a month behind your salary is not necessarily late. Two months behind is a different conversation.
One more divisor, because mixing the two is a common error. Section 18A says that notwithstanding section 60I, an incomplete month is paid as monthly wages divided by the days in the wage period, multiplied by the days eligible. That is a calendar-day divisor for an incomplete month; 26 is the divisor for a rate of pay. On records, every employer must keep registers about each employee, preserved so every particular stays available for inspection for not less than 6 years.
If the overtime is not paid
JTKSM’s own list of claim types names overtime wages outright, heard in the Labour Court under section 69 — no filing fee, and no cap on what the Director General can order, with interest at 8% a year from the 31st day. Non-payment is also a separate offence, fined up to RM 50,000 on conviction. Which door to use, how to file, and what to bring are covered in a dedicated guide to Labour Department complaints.
Sabah and Sarawak: different ordinances, same RM 4,000 line
Nothing above is Sabah or Sarawak law. JTKSM says so directly: the 2022 amendments apply only in Peninsular Malaysia and the Federal Territory of Labuan, while Sabah runs on the Labour Ordinance (Sabah) Chapter 67 and Sarawak on the Labour Ordinance (Sarawak) Chapter 76. Both were overhauled in 2025 and both changes commenced on 1 May 2025, except Part IVA — Sabah by Act A1753, Sarawak by Act A1754.
Two things carried across. Both moved to a 45-hour week, Act A1753 substituting forty-five for forty-eight in Sabah’s section 104 and Act A1754 doing the same in Sarawak’s section 105. And both new First Schedules draw the RM 4,000 line — against their own section numbers, which is exactly why the peninsular citations cannot be reused. What we did not find on either department’s site is any rule setting a monthly overtime ceiling, so the 104-hour figure is not carried across here. Go to the source: Jabatan Tenaga Kerja Sabah and Jabatan Tenaga Kerja Sarawak.
Walaoeh Verdict
Three things to write down before you argue with anyone. Your normal hours of work per day as stated in your contract — the contractual figure, not what you actually work, because that is the divisor. Your monthly wage excluding commission, subsistence allowance and overtime, because that is what the RM 4,000 line is tested on. And the hours themselves, day by day: the employer’s registers stay available for 6 years, and yours should too.
The number worth checking on your payslip is the hourly rate, not the multiplier. Almost every dispute traceable in these provisions comes from the divisor rather than the 1.5 — a monthly wage divided by something other than 26, or divided by 26 and then by the hours someone actually worked instead of the normal hours in the contract. Subsection 60I(2) allows a different formula, but only when the result is not lower.
Two things we deliberately did not print. Whether EPF or SOCSO contributions are payable on overtime pay: no statement was found on an official EPF or PERKESO page, and the First Schedule’s exclusion of overtime from wages is only for its own RM 4,000 threshold. And tax, which belongs to LHDN. On the notice period at the other end of a job, see 👉 Resignation Letter Malaysia: Notice Period Rules & Template.
Frequently Asked Questions
I earn more than RM 4,000 a month. Do I get overtime pay?
Not at the statutory rate. First Schedule paragraph 1A disapplies subsection 60A(3) — the overtime rate — to a person whose wages exceed RM 4,000 a month, along with subsections 60(3), 60C(2A), 60D(3), 60D(4) and section 60J. JTKSM states it plainly: above RM 4,000, except manual workers, there is no claim for overtime pay, rest-day pay, public-holiday pay, shift allowance or termination benefits. Two qualifications. Paragraph 2 keeps the whole Act applying irrespective of the amount of wages to manual workers, to people operating vehicles carrying passengers or goods for reward, and to supervisors of manual workers. And the wages tested exclude commissions, subsistence allowance and overtime payment. Whatever your contract itself promises is still a payment due under a contract of service, and section 69 covers those.
Why is my hourly rate worked out on 26 days a month?
Because the Act says 26, not because anyone counted your days. Subsection 60I(1A) sets the ordinary rate of pay for a monthly-paid employee as the monthly rate of pay divided by 26, and subsection 60I(1)(b) makes the hourly rate that figure divided by the normal hours of work. JTKSM’s own overtime estimator hard-codes 26 in the same way. Subsection 60I(2) lets an employer use a different method or formula, but only if the result is not lower than the formula in the Act. Do not confuse it with section 18A, which pays an incomplete month as monthly wages divided by the days in the wage period times the days eligible — a different divisor for a different job, and section 18A says so with the words ‘notwithstanding section 60I’.
Does working a rest day or a public holiday count towards the 104 hours?
No. The Employment (Limitation of Overtime Work) Regulations 1980 set the limit at a total of 104 hours in any one month, and the proviso to paragraph 60A(4)(a) says that work on a rest day, on a gazetted public holiday referred to in subsection 60D(1), or on a paid holiday substituted for one shall not be construed as overtime work for the purposes of that subsection. It changes the ceiling, not the pay: those hours are still paid at the rest-day and public-holiday rates. The Director General may also permit overtime above the limit on a written application, with 30 days to appeal that decision to the Minister.
My overtime was not in this month’s pay. Is that late?
Probably not, by the Act’s own deadline. Subsection 19(1) requires wages not later than the 7th day after the last day of a wage period, but subsection 19(2) gives wages for work on a rest day, on a gazetted public holiday and overtime under section 60A until the last day of the next wage period. So overtime one cycle behind your salary is within the rule. If it is further behind than that, the Act treats failing to pay overtime wages due under it as an offence under subsection 100(2), with the court also ordering payment of what is due on conviction — whether that applies to your own case is for the Labour Department to determine, not this article.
The company moved us to nine hours a day. Is that allowed?
Yes, within limits. The proviso to subsection 60A(1) allows the eight-hour limit to be exceeded on some days where, by agreement in the contract of service, the hours on one or more other days are less than eight — but no employee may be required to work more than nine hours in one day or 45 hours in one week. JTKSM was asked exactly this, whether a company on eight hours over six days could move to five days at nine hours, and answered in one word: yes. Two things go with it. The employer must amend the working hours in the contract and give you a copy, and it may not reduce wages because of the change. Note the side effect on your overtime: a longer normal day means a lower hourly rate of pay, because the ordinary rate is divided by the normal hours of work.
Sources
Every figure above comes from one of these, all checked on 14 September 2026.
- Laws of Malaysia, Act 265 — Employment Act 1955, updated text as at 1 January 2023, hosted by JTKSM. Sections 1, 2, 18A, 19, 59, 60, 60A, 60C, 60D, 60I, 61, 69, 99A, 100 and the First Schedule.
- JTKSM — Employment (Limitation of Overtime Work) Regulations 1980. The 104-hour monthly limit, and the amendment history.
- JTKSM — Employment Act 1955 (Amendment) 2022 FAQ and Waktu Bekerja notice. The 1 January 2023 date, the 45-hour week for normal and shift hours, the no-wage-reduction answer, rest time, and the nine-hour five-day answer.
- JTKSM — Pengiraan Anggaran Bayaran Bekerja Lebih Masa, the department’s own overtime estimator, and the code behind it. Where the divide-by-26 and the 1.5, 2 and 3 multipliers appear in the department’s own working.
- JTKSM — Kes Buruh, Labour Case FAQ and Aduan. The RM 4,000 exclusion in plain terms, overtime as a claim type, no filing fee, where to file, what to bring, the process, and the 14-day appeal.
- Federal Government Gazette — P.U. (A) 376, Minimum Wages Order 2024. The RM 1,700 a month and RM 65.38 a day figures used in the illustration.
- Jabatan Tenaga Kerja Sabah — Act A1753 and P.U. (B) 166. Sabah’s 45-hour week, its First Schedule, and the 1 May 2025 commencement.
- Jabatan Tenaga Kerja Sarawak — Act A1754, P.U. (B) 165 and its English FAQ. Sarawak’s 45-hour week, its First Schedule, and the same 1 May 2025 commencement.
About this guide. Put together by an independent Malaysian who reads the gazetted text rather than the summaries of it, and re-checked against those sources on a schedule. It sets out what the rules say; it is not legal, tax or financial advice, and a wage dispute can turn on facts a web page cannot see — your contract, your roster, what was actually agreed. Rates, thresholds and forms in Malaysia change. Before you rely on a figure here, confirm it with the Labour Department or a licensed professional.