Overtime pay Malaysia rules are stricter and more precise than most employers realise — and since the Employment (Amendment) Act 2022 took effect, the penalty for getting them wrong has risen to RM50,000 per offence. Whether you are an employee checking your payslip or an employer processing monthly payroll, knowing the correct overtime pay Malaysia formula makes a material difference every month. This complete 2026 guide covers who qualifies, the exact ORP and HRP calculation formula, official rates for normal days, rest days and public holidays, the 104-hour monthly cap, worked examples at two salary levels, and the most common mistakes that trigger Labour Department complaints.

1.5×OT rate — normal working day beyond contracted hours

2× / 3×Rest day and public holiday OT rates

104 hrsMaximum overtime allowed per calendar month

RM50KMaximum penalty for failing to pay correct overtime in Malaysia

Who Qualifies for Overtime Pay in Malaysia? — The RM4,000 Threshold

Not every employee is automatically entitled to statutory overtime pay Malaysia law mandates under Section 60A of the Employment Act 1955. Entitlement is determined by salary level and job type — and getting this classification right is the first step to calculating overtime pay correctly for each individual in your Malaysia payroll.

✅ Entitled to Overtime Pay Malaysia

Employees earning RM4,000 or less per month
Manual labourers — regardless of wages
Employees operating or maintaining mechanised vehicles — regardless of wages
Employees supervising manual labourers — regardless of wages

❌ Not Statutorily Entitled (Above RM4,000, Non-Manual)

Employees earning above RM4,000 per month in non-manual roles
Domestic servants (maids, personal drivers in private homes)
Employees whose contracts provide for OT — contractual rights still apply even without statutory protection

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Post-2022 Amendment: The Employment (Amendment) Act 2022 extended the Employment Act's general coverage to all employees regardless of salary from 1 January 2023. However, the overtime pay Malaysia provisions under Section 60A specifically remain limited to those earning RM4,000 or below and the categories above. Employees earning above RM4,000 in non-manual roles have overtime entitlement only if their employment contract provides for it — which is why well-drafted employment contracts matter.

Normal Working Hours & Overtime Limit Malaysia 2026

Before calculating any overtime pay Malaysia amount, you must establish what constitutes "normal working hours" for that employee — because overtime pay only begins once those contracted hours are exceeded.

Maximum normal hours: Not more than 8 hours per day and not more than 45 hours per week (reduced from 48 hours under the 2022 Amendment)
Break entitlement: Not more than 5 consecutive hours without at least a 30-minute break (which is not counted as working time)
OT cap: Employees may not work more than 104 overtime hours per calendar month under the Employment (Limitation of Overtime Work) Regulations 1980 — approximately 3.5 additional hours per working day
Shift workers: May work more than 8 hours/day or 45 hours/week, but the average over any 3-week period must not exceed 45 hours/week

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When Does OT Begin? For a standard 9am–6pm employee with a 1-hour lunch break (7 working hours actual), overtime only begins after 6pm — not from 5pm. The starting point for overtime pay Malaysia is after all contracted daily hours are completed, which includes the total spread of 10 hours under Section 60A(3b) for non-shift workers (8 working hours + 2 hours of breaks).

The ORP & HRP Formula — Foundation of Every Overtime Pay Malaysia Calculation

All overtime pay Malaysia calculations are built on two derived rates that come from the employee's monthly salary. Getting these rates right is essential — errors at this stage compound across every OT, rest day, and public holiday calculation for the month.

ORP = Monthly Salary ÷ 26 days ← Ordinary Rate of Pay (per day)

HRP = ORP ÷ Normal Daily Working Hours ← Hourly Rate of Pay

The divisor of 26 days is fixed by Section 60I(a) of the Employment Act 1955 — it does not change based on how many working days are in a particular month. Whether February has 20 working days or March has 22, the ORP for overtime pay Malaysia purposes always uses 26.

🔢 Example: Employee earning RM3,000/month, 8-hour working day

Monthly salaryRM 3,000

ORP (Ordinary Rate of Pay per day) = RM3,000 ÷ 26RM 115.38

HRP (Hourly Rate of Pay) = RM115.38 ÷ 8 hoursRM 14.42

Normal day OT rate (1.5× HRP)RM 21.63 per OT hour

Rest day OT rate (2× HRP)RM 28.85 per OT hour

Public holiday OT rate (3× HRP)RM 43.27 per OT hour

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Why 26 and not the actual working days in the month? Section 60I(a) of the Employment Act 1955 defines the ordinary rate of pay using 26 as the divisor for monthly-rated employees. Using the actual number of working days in a month would produce different ORP values month-to-month, creating inconsistency. The fixed 26-day divisor standardises overtime pay Malaysia calculations across all months — and is mandatory. Using a different divisor (e.g., 22 or 20) in your payroll system produces non-compliant calculations.

Overtime Pay Malaysia Rates 2026 — Normal Day, Rest Day & Public Holiday

Normal Working Day

1.5×

HRP per overtime hour
For every hour worked beyond normal daily contracted hours on a regular working day

Rest Day

0.5× / 1× / 2×

ORP (≤ half day) / ORP (half–full day) / HRP (OT beyond normal hours)
Tiered based on hours worked

Public Holiday

2× / 3×

ORP for the full day (within normal hours) / HRP per hour (beyond normal hours)

Situation	Hours Worked	Rate Payable	Basis
Normal working day — overtime hours	Beyond contracted daily hours	1.5× HRP per hour	Section 60A(3)(a)
Rest day — short work	Up to half normal hours (≤4 hrs for 8-hr day)	0.5× ORP (half day's pay)	Section 60(3)(a)
Rest day — half or full day	More than half, up to normal hours (4–8 hrs)	1× ORP (one full day's pay)	Section 60(3)(b)
Rest day — overtime (beyond normal hours)	Beyond contracted daily hours	2× HRP per hour	Section 60(3)(c)
Public holiday — within normal hours	Up to contracted daily hours	2× ORP for the day	Section 60D(3)
Public holiday — overtime	Beyond contracted daily hours	3× HRP per hour	Section 60D(3aa)
All overtime pay Malaysia rates apply to employees eligible under the Employment Act 1955. Source: Employment Act 1955 and Ministry of Human Resources Malaysia.

Worked Examples — Overtime Pay Malaysia

Example 1: Normal Day OT — RM2,600/month, 8-hour day

👩‍💼 Siti, RM2,600/month, 8-hour day, works 2 extra hours on a normal weekday

Monthly salaryRM 2,600

ORP = RM2,600 ÷ 26RM 100.00

HRP = RM100 ÷ 8RM 12.50

Normal day OT (1.5 × RM12.50 × 2 hours)RM 37.50

Example 2: Rest Day — RM2,600/month, works 4 hours (half day)

📅 Siti works 4 hours on Sunday (rest day) — half of normal 8-hour day

Hours worked on rest day4 hours (≤ half day)

Rate: 0.5 × ORP (0.5 × RM100)RM 50.00

Example 3: Rest Day — Works Full 8 Hours (1× ORP)

📅 Siti works 7 hours on Sunday (more than half day, within normal hours)

Hours worked on rest day7 hours (> half, ≤ 8 hrs)

Rate: 1 × ORP (1 × RM100)RM 100.00

Example 4: Public Holiday — Full Day Within Normal Hours

🎉 Siti works on a gazetted public holiday, 8 hours (normal working hours only)

Base pay already included in monthly salaryAlready paid

Additional holiday pay: 2 × ORP (2 × RM100)RM 200.00

Example 5: Public Holiday — Works Beyond Normal Hours (OT)

🎉 Siti works 10 hours on a public holiday (8 normal + 2 OT hours)

Public holiday day pay: 2 × ORPRM 200.00

OT hours beyond normal (2 hours × 3 × HRP = 2 × 3 × RM12.50)RM 75.00

Total extra earnings for the dayRM 275.00

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Public Holiday Already Paid: Remember that when calculating overtime pay Malaysia on public holidays, the employee's regular daily wage is already included in their monthly salary. The 2× ORP is additional pay on top of what they already earn. You do not need to pay 3× the full day rate — you pay their regular salary plus an additional 2× ORP for working the holiday within normal hours.

What Counts Towards Overtime Pay Malaysia? — Allowances Included

When computing ORP for overtime pay Malaysia purposes, certain payments must be included in the wage base even if they are paid separately from basic salary. This is a common source of systematic underpayment in Malaysian payroll.

✅ Included in Wages for OT Calculation

Basic salary
Shift allowance (fixed and recurring)
Call-back allowance
Attendance allowance
Acting allowance (for carrying out duties of higher post)
Any fixed and recurring cash payments in the employment contract

❌ Excluded from Wages for OT Calculation

Housing allowance / accommodation benefits
Meal / food allowances
Travel / mileage / transport reimbursements
Overtime pay itself
Service charge distributions
Gratuities and payments for termination
Annual / discretionary bonuses
EPF and SOCSO employer contributions

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Common Underpayment Error: Many Malaysian employers calculate overtime pay based on basic salary only — excluding shift allowances, attendance allowances, and other regular cash payments that legally form part of "wages" under the Employment Act 1955. If these allowances meet the definition of wages under the Act, they must be included in the ORP base. An employee successfully challenging underpaid overtime pay Malaysia at the Labour Department can claim backdated amounts for up to 2 years.

Get Overtime Pay Malaysia Right — Every Month

KC Group's payroll services calculate OT, rest day, and public holiday pay using the correct Employment Act formula — for every employee, automatically.

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Rest Day Pay — Detailed Breakdown

Rest day pay under Section 60 of the Employment Act is separate from overtime pay Malaysia on normal weekdays but forms part of every employer's total pay obligation. The amount depends specifically on how many hours the employee works on the rest day:

Hours Worked on Rest Day	Entitlement	Calculation
Up to half normal working hours (≤4 hrs for 8-hr day)	Half a day's pay	0.5 × ORP
More than half, up to normal hours (4–8 hrs)	One full day's pay	1 × ORP
Beyond normal working hours (>8 hrs)	One full day's pay + OT	1 × ORP + (extra hours × 2 × HRP)
These rest day pay entitlements are in addition to the employee's regular monthly salary, which already covers their normal contracted days. The full month's salary does not need to be recalculated — only the additional rest day payment is added.

Public Holiday Overtime Pay Malaysia — Complete Rules

Public holiday pay is where overtime pay Malaysia calculations become most complex, because the Employment Act distinguishes between work within normal hours and work beyond them — and both attract different rates:

If the public holiday falls on a normal working day: The employee who does NOT work still receives their normal daily pay (already in monthly salary). If they DO work, they receive an additional 2× ORP — making their effective pay for that day 3× ORP in total.
If the public holiday falls on a rest day: If the employee works, they receive 2× ORP for working within normal hours. Any hours beyond normal working hours attract 3× HRP per overtime hour.
Substitute public holiday: Under Section 60D(1B), if a public holiday falls on an employee's rest day, an alternative holiday must be given on the next working day — or if that day is also a holiday, on the following working day.

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Public Holiday Pay Is Subject to EPF: Unlike certain allowances, overtime pay Malaysia for working on public holidays — specifically the 2× ORP portion — is subject to EPF contributions under the EPF Act 1991. Both employer and employee contributions are calculated on public holiday pay where it forms part of "wages" as defined. Ensure your payroll software applies EPF correctly to public holiday earnings.

Penalties for Non-Payment of Overtime Pay Malaysia

Employers who fail to pay correct overtime pay Malaysia face escalating consequences under the Employment Act 1955 and its 2022 amendments:

Offence	Penalty	Legal Basis
Failure to pay correct overtime pay Malaysia	Fine up to RM50,000 per offence	Employment (Amendment) Act 2022 — General penalty
Exceeding 104-hour monthly OT cap	Fine up to RM10,000	Employment (Limitation of Overtime Work) Regulations 1980
Failure to pay wages (including OT) within 7 days of pay period	Criminal penalty under Section 99A	Section 99A Employment Act 1955
Underpayment of overtime — backdated claim	Employer must pay arrears for up to 2 years retrospectively	Labour Department enforcement under Employment Act
Employees who believe they have been underpaid on overtime pay Malaysia can file a complaint with the Labour Department (Jabatan Tenaga Kerja) free of charge. Complaints can be submitted online or in person at any JTK branch.

How Payroll Software Handles Overtime Pay Malaysia Automatically

Manual calculation of overtime pay Malaysia — especially for teams with a mix of regular, rest day, and public holiday overtime every month — is time-consuming and error-prone. A single wrong divisor (using 22 instead of 26, for instance) underpays every affected employee and creates systematic liability.

Certified payroll software like SQL Account and AutoCount calculate overtime pay Malaysia automatically using the correct Employment Act formula:

ORP and HRP derived from the fixed 26-day divisor per Section 60I(a)
Automatic flagging when an employee approaches or exceeds the 104-hour monthly OT cap
Correct differentiation between normal day OT (1.5×), rest day rates (0.5×/1×/2×), and public holiday rates (2×/3×)
Accurate inclusion of qualifying allowances in the ORP base (shift allowance, attendance allowance, call-back allowance)
EPF, SOCSO, and EIS contributions correctly computed on the expanded wage base that includes overtime pay
LHDN-compliant payslips showing each OT type separately for employee transparency and audit trail

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KC Group Payroll Services: KC Group's payroll outsourcing handles overtime pay Malaysia calculations for every employee category — including mixed-shift workforces, weekend operations, and public holiday rosters. Every OT figure is calculated using the correct Employment Act formula, generating compliant payslips and statutory submissions. Find out about KC Group's payroll services →

Frequently Asked Questions — Overtime Pay Malaysia 2026

How is overtime pay Malaysia calculated for a monthly salaried employee?

For a monthly salaried employee, overtime pay Malaysia is calculated in two steps. First: ORP (Ordinary Rate of Pay) = Monthly Salary ÷ 26. This gives the daily rate. Second: HRP (Hourly Rate of Pay) = ORP ÷ Normal Daily Working Hours. Then apply the applicable multiplier: 1.5× HRP for each normal weekday OT hour, 2× HRP for rest day OT hours, and 3× HRP for public holiday OT hours. The divisor of 26 is fixed by Section 60I(a) of the Employment Act 1955 — it does not vary by month.

What is the overtime pay Malaysia rate on a rest day?

Rest day overtime pay Malaysia uses a tiered approach. If an employee works up to half their normal daily hours (e.g., up to 4 hours for an 8-hour worker), they receive 0.5× ORP. If they work more than half but within normal hours (e.g., 4–8 hours), they receive 1× ORP (one full day's pay). If they work beyond their normal daily hours on a rest day, they receive the 1× ORP for the day PLUS 2× HRP for each additional overtime hour beyond normal hours.

Are employees earning above RM4,000 entitled to overtime pay in Malaysia?

Employees earning above RM4,000 per month in non-manual roles are not entitled to statutory overtime pay Malaysia under Section 60A of the Employment Act 1955. However, there are exceptions: manual labourers are entitled to OT regardless of salary, as are employees operating mechanised vehicles and those supervising manual workers. Employees above RM4,000 in non-manual roles may still have contractual OT entitlement if their employment contract provides for it — which is enforceable separately from the Employment Act.

What is the maximum overtime hours allowed per month in Malaysia?

Under the Employment (Limitation of Overtime Work) Regulations 1980, employees may not work more than 104 overtime hours in any calendar month. This is approximately 3.5 additional hours per working day. Employers who require employees to exceed this cap face fines of up to RM10,000. For shift workers, the overtime limit applies differently — the average working hours over any 3-week period must not exceed 45 hours per week. Overtime pay Malaysia payroll systems should alert HR before employees approach this cap.

What is the overtime pay Malaysia rate for working on a public holiday?

For working on a gazetted public holiday within normal working hours, an employee is entitled to an additional 2× ORP (2 times the daily ordinary rate) — on top of their regular daily wage already included in their monthly salary. If they work beyond normal hours on a public holiday, the extra hours are paid at 3× HRP (3 times the hourly rate). So a full day of normal-hours work on a public holiday effectively results in the employee receiving 3× their daily rate in total (1× in their monthly salary + 2× additional holiday pay).

Why is 26 used as the divisor for overtime pay Malaysia calculation?

Section 60I(a) of the Employment Act 1955 defines the Ordinary Rate of Pay (ORP) as monthly rate of pay divided by 26. This divisor is legally mandated and applies regardless of how many actual working days are in a given month. Using any other divisor (such as 20, 22, or the actual working days in the month) produces a non-compliant overtime pay Malaysia calculation that may result in systematic underpayment and Labour Department penalties. All certified payroll software — including SQL Account and AutoCount — use 26 as the fixed divisor.

Final Word: Correct Overtime Pay Malaysia Is a Legal Obligation, Not an Option

Overtime pay Malaysia is governed by precise statutory formulas — not estimates, conventions, or industry norms. The Employment Act 1955 specifies the divisor (26), the rates (1.5×, 2×, 3×), the qualifying employees (below RM4,000 and manual workers), the monthly cap (104 hours), and the penalties for getting it wrong (up to RM50,000 per offence since the 2022 Amendment).

For employers, the most common overtime pay Malaysia compliance failures are using the wrong divisor in the ORP calculation, excluding qualifying allowances from the wage base, misclassifying rest day hours into the wrong tier, and failing to pay additional public holiday rates on top of the normal monthly salary. Each of these errors is systematic — they apply to every affected employee every month — and backdated claims can reach two years.

The most reliable solution is payroll software that applies the Employment Act formula automatically, or a professional payroll service that verifies every overtime pay Malaysia figure before payslips are issued.

👉 Let KC Group handle your overtime pay Malaysia calculations — correct Employment Act formula, every pay cycle →

Overtime Pay Malaysia — Calculated Correctly, Every Month

KC Group · Malaysian payroll outsourcing · Overtime, rest day & public holiday pay · EPF, SOCSO, PCB · Employment Act compliant payslips

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Overtime Pay Malaysia 2026: Complete Guide — Calculation Formula, Rates & Employer Obligations