Overtime, Leaves & Bonuses in Payroll | GetBiz HRMS

Quick Summary

Managing payroll is more than just cutting a paycheck. It involves understanding complex components like overtime, leaves, and bonuses, all of which affect your employees' compensation and your compliance with labor laws. This blog walks you through how to simplify and automate these crucial elements using GetBiz Payroll, especially for growing businesses and SMEs in India.

What is Overtime in Payroll?

Overtime refers to any hours worked beyond an employee's regular working schedule. In India, this typically means working beyond 48 hours per week or 9 hours per day.

According to the Factories Act, 1948, overtime must be compensated at twice the ordinary rate of wages. Learn more on India’s official labor site.

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How Overtime Bonus Works in India

If your business has frequent workloads requiring overtime, here's how it's generally calculated:

Example:

• Base Salary: ₹20,000/month
• Hourly Rate: ₹20,000 ÷ 26 working days ÷ 8 hours = ₹96.15/hour
• Overtime (10 hours): ₹96.15 × 2 × 10 = ₹1,923

You must also track compensatory off if you're providing time-off instead of overtime pay.

Leaves and Their Payroll Impact

Leave management directly affects payroll, especially in tracking:

• Paid Leaves (PL)
• Casual Leaves (CL)
• Sick Leaves (SL)
• Loss of Pay (LOP)

If leaves aren’t recorded accurately, payroll will either underpay or overpay an employee.

Leave Type & Payroll Action

Leave Type	Payroll Status	Action
Paid Leave	Paid fully	No deduction
Sick Leave	Paid (if available)	Deduct if exhausted
Casual	Paid (limited)	Deduct if exhausted
LOP	Not paid	Deduct for absent days

Bonus Calculations and Legal Compliance

Bonuses are typically performance-based or festive, but some are mandatory.

Types of Bonuses:

• Statutory Bonus: Under Payment of Bonus Act, 1965
• Performance Bonus
• Referral Bonus
• Festival Bonus

Example:

If an employee earns below ₹21,000/month and your company is liable under the Bonus Act, you must pay a minimum bonus of 8.33% of salary annually.

Why Cloud Payroll Systems Make It Easy

Manual calculations = mistakes, delays, and legal risks.

A cloud-based payroll system like GetBiz Payroll helps you:

• Auto-calculate overtime
• Sync leave data with payroll
• Distribute bonuses on set rules
• Stay compliant with Indian labor laws
• Access anytime, anywhere

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Real-World Examples

Example 1:

A company with 50 employees uses Excel for payroll. They miscalculate overtime and end up overpaying ₹15,000 monthly.

Solution: GetBiz Payroll automates these calculations, eliminating manual errors.

Example 2:

An SME delays bonuses due to confusion about applicable rules. Employees feel undervalued.

Solution: With GetBiz, bonus calculations are rule-based and automated with legal templates.

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Key Benefits of Using GetBiz Payroll

• Real-time attendance and leave sync
• Auto-calculate overtime and bonuses
• Built-in compliance with Indian laws
• Custom rules for SMEs and growing teams
• Free plan for small teams

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Tools Comparison Table

Feature	GetBiz Payroll	Manual Excel	Other Paid Tools
Overtime Automation	✅	❌	✅
Leave & LOP Calculation	✅	❌	✅
Bonus Integration	✅	❌	✅
Cloud Access	✅	❌	✅
India Labor Compliance	✅	❌	Depends

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Overtime & Bonus Distribution Chart

Employee Pay Breakdown - March 2025
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| Component           | Amount (₹) |
|---------------------|------------|
| Basic Salary        | 20,000     |
| Overtime (10 hrs)   | 1,923      |
| Performance Bonus   | 2,000      |
| Festival Bonus      | 1,000      |
| Total Payout        | 24,923     |

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Final Thoughts

Managing overtime, leave, and bonuses might feel overwhelming—but with the right tools, it doesn’t have to be.

At GetBiz, we built our Payroll System specifically for Indian SMEs, startups, and growing companies. Our software simplifies your compliance while keeping employees satisfied and paid accurately—on time, every time.

Also See: 7 Reasons to Automate Payroll in Your Growing Business

What is the overtime pay rule in India?

As per Indian law, overtime is paid at double the regular hourly rate.

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Is bonus payment mandatory in India?

Yes, for eligible employees under the Payment of Bonus Act.

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How can GetBiz Payroll handle leaves?

It automatically syncs leave data from attendance and applies LOP, PL, SL, and CL accordingly.

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Can I use GetBiz Payroll for free?

Yes, we offer a free plan for small teams and startups.

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Does the software comply with Indian labor laws?

Yes, it includes statutory bonus and overtime compliance built-in.

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Can I customize bonus rules?

Absolutely, you can define performance-based, referral, and festive bonus rules.

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Is it cloud-based?

Yes, access it anytime, from any device.

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How do I track overtime?

Through automated timesheets, synced with attendance records.

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Is GetBiz suitable for large companies too?

Yes, we scale with you—from startups to enterprises.

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How secure is GetBiz Payroll?

It's hosted on secure, encrypted cloud servers with regular data backups.

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