We have an inquiry from many clients of how to calculate overtime payment for monthly salaried employees. If you have not read our excerpt of Thailand Labor Law, please consider reading it first. Below is the answer and an example of how to calculate overtime payment.
The maximum number of working hours of employees is fixed by law at 8 hours a day and 48 hours a week in total. Most employers, however, set it at 8 hours a day and 5 days a week (so 40 hours a week). For work performed in excess of the maximum number of hours, which is fixed either by the company’s regulation or by specific employment agreement (if the latter is lower), the employee must be paid overtime compensation. The rates of overtime are:
– 1.5 times if the employee works outside of normal working hours on normal work days.
– 2 times if the employee works during normal working hours on a holiday. However, in case of monthly salaried employees, the employer will pay only 1 time extra because his monthly salary has already covered 1 time when he does not work on the day.
– 3 times if the employee works outside of normal working hours on a holiday.
Example: A company’s normal work hours is 8 AM to 5 PM with 1 hour lunch break in between, Monday to Friday. If an employee whose monthly salary is THB 24,000, works for an hour after 5 PM, then the overtime rate is 150% of his hourly rate. You need to use 30 days per month (even if a particular month has more or fewer than 30 days) and 8 hours per day to calculate his hourly rate. In our example, his hourly rate is 24,000/30/8 = THB 100.
If the same employee works on a Saturday during 8 AM to 5 PM with 1 hour lunch break, he will be paid an OT of THB 100 per hour for this day.
If this employee happens to work after 5 PM on a holiday, he will receive 3 times the normal hourly rate for this period of work which is 100 x 3 = THB 300 per hour.