Overtime pay and comp-off leave
Updated 2026-11-07
What it is
Overtime is time worked beyond the employee's shift, paid as an extra earning on the payslip. Comp-off is a day of leave earned by working on an off day or holiday.
PunchMe builds both from attendance. You don't enter hours by hand. Each check-out becomes an overtime or comp-off entry if it qualifies.
Who uses it
| Who | What | Permission |
|---|---|---|
| Admin or HR | Turn overtime and comp-off on, set rates | settings.view to see, settings.edit to save |
| HR or manager | Approve or reject entries | attendance.manage |
| Anyone viewing attendance | See the overtime list | attendance.view |
| Payroll team | Overtime appears in the payroll run | payroll.manage |
Approvers only see entries for employees in their scope.
Where to find it
- Settings: Payroll page, Payroll rules card, sections Overtime and Comp-off. Click Save rules.
- Approvals: Attendance, Overtime tab. Pick a month and a status.
- Manager app: overtime entries show in the approvals inbox. See Manager app.
- Payslip: an earning line like "Overtime (6.5 h × 1.5)".
- Leave balance: comp-off shows as a leave type called Comp off.
Turning it on or off
| Setting | Default | What it does |
|---|---|---|
| Pay overtime | Off | Turns overtime on |
| Count after (minutes beyond shift) | 30 | Extra time below this is ignored |
| Rate | 1.5× hourly | 1×, 1.5× or 2× the hourly rate |
| Monthly cap (hours) | Blank (no cap) | Most overtime hours paid per employee per month |
| Overtime and comp-off need approval | On | Entries wait for approval before they count |
| Work on an off day or holiday earns comp-off leave | Off | Turns comp-off on |
| Comp-off expires after (days) | 90 | 1 to 730 days from the day worked |
What happens when it's on
On a working day
PunchMe compares worked time with the employee's shift length.
- Worked time = check-in to check-out.
- Extra = worked time minus shift length. If the employee has no shift, PunchMe uses 8 hours.
- If the extra is at least Count after, the whole extra becomes overtime.
Example: 9:00 to 18:00 shift (9 hours), threshold 30 minutes. The employee works 9:00 to 19:10, which is 10 h 10 min. Extra is 70 minutes, so 1 h 10 min of overtime. If they had left at 18:20, the extra of 20 minutes is below the threshold, so no overtime.
The threshold is a gate, not a deduction. Once crossed, all extra minutes count.
On an off day or holiday
An off day is a day that isn't in the company's working days, or a holiday for the whole company or the employee's home office.
- Comp-off on: the day earns comp-off instead of overtime. A full shift or more earns 1 day. Half a shift or more earns ½ day. Less earns nothing.
- Comp-off off, overtime on: all hours worked that day are overtime, if they reach the threshold.
Approval
With Overtime and comp-off need approval on, each entry starts as Pending on the Overtime tab. Click Approve or Reject. With it off, entries are approved straight away.
How overtime is paid
When you run payroll, PunchMe adds up the month's approved overtime per employee, applies the monthly cap, and adds one earning line.
| Pay basis | Hourly rate |
|---|---|
| Monthly salary | Monthly gross ÷ working days in the month ÷ shift hours |
| Daily wage | Day rate ÷ shift hours |
| Hourly wage | The hourly rate |
Overtime pay = hourly rate × rate multiplier × overtime hours.
Example: gross ₹26,000, 26 working days, 8-hour shift. Hourly rate is ₹125. At 1.5× for 10 hours, overtime pay is ₹1,875.
For workers covered by the Factories Act, overtime must be paid at twice the ordinary rate. Pick 2× hourly if that applies to you.
How comp-off is credited
When a comp-off entry is approved, PunchMe adds the days to the employee's Comp off leave balance. PunchMe creates this paid leave type the first time it's needed. The employee then applies for it like any other leave.
Comp-off expires Comp-off expires after (days) after the day worked. A daily job removes the unused part of expired credits. Leave taken is counted against the oldest credit first.
What happens when it's off
- With both off, PunchMe creates no new entries.
- With Pay overtime off, no overtime line is added in payroll, even for entries already approved.
- With comp-off off, off-day work becomes overtime instead (if overtime is on).
Changing it midway
- Pending entries follow the attendance. If HR edits a day or approves a correction, a pending entry updates its minutes. If the day no longer qualifies, the pending entry is removed.
- Decided entries are frozen. Once approved or rejected, an entry doesn't change, even if the day is edited later. There is no undo on a decision.
- Turning approval off doesn't approve old pending entries. Approve them on the Overtime tab.
- Changing the rate or cap applies to the next payroll run. Finalized payslips don't change.
- Turning comp-off off keeps credits already given. They still expire on schedule.
- New entries appear each day for the last 3 days, when you open the Overtime tab for a month, and when you run payroll for a month.
Limits and edge cases
- Forgotten check-outs. When PunchMe closes a forgotten check-out automatically, it uses the shift end time. So these days don't earn overtime.
- Working days for overtime come from the company's working days, not each employee's.
- No comment can be added when approving overtime, in the dashboard or the Manager app.
- Overtime in the app. The employee app's performance view shows "Overtime" hours worked beyond shift. That number ignores the threshold and approvals, so it can differ from what is paid.
- Night shifts are handled. Shift length is worked out across midnight.
- Monthly cap applies to the total approved overtime in the payroll month, not per day.
Related
Common questions
Do employees have to apply for overtime?
No. Overtime comes from their check-out times. HR or the manager approves it if approval is on.
Why don't I see overtime for today?
Entries are built from check-outs. Until the employee checks out, there is nothing to count. Open the Overtime tab for the month to refresh it.
Can I pay overtime and also give comp-off for the same holiday?
No. When comp-off is on, off-day and holiday work earns comp-off only. Working-day overtime is still paid.
What happens if comp-off expires?
The unused days are removed from the Comp off balance. Days already taken as leave are not affected.
Is overtime part of PF or ESI wages?
Overtime is a separate earning line, not Basic or DA, so it is not part of PF wages. It is part of the month's gross, so it counts for ESI, professional tax, LWF and TDS. See Statutory compliance.