How to Calculate Overtime Pay During Ramadan in Malaysia

During Ramadan, many activities need schedule adjustments, such as office working hours, restaurant shifts for Suhoor and Iftar, and other business operations.

With these changes, some employees may need to work overtime.

So, how should overtime pay be calculated? In this article, we will break down how to calculate overtime pay during Ramadan in a simple and clear way.

Let’s dive into the details.

Do employers need to reduce working hours?

During Ramadan, many Muslim employees wake up early for Suhoor (the pre-dawn meal) and may feel more tired later in the day.

Some businesses adjust working hours to help employees manage fasting while keeping up with their tasks.

Malaysian labor laws do not require businesses to reduce working hours during Ramadan.

However, some companies adjust schedules to help their employees.

For example, instead of the usual 9 AM to 6 PM shift, a business might change it to 8 AM to 4 PM so employees can finish work earlier and prepare for Iftar (breaking the fast).

How fasting affects productivity

Fasting can make employees feel less energetic, especially in the afternoon.

Employers can help by assigning important tasks in the morning when employees feel fresh and keeping lighter work for later in the day.

Common industry practices for Ramadan/Puasa shifts

Different industries handle Ramadan schedules in different ways:

Retail and hospitality: Businesses that operate at night, like restaurants and supermarkets, may extend evening hours to serve customers after Iftar.
Factories and logistics: Shift workers may get additional rest breaks or adjusted shift times.
Office work: Many companies offer flexible hours or remote work to help employees manage their fasting and work duties.

How to Calculate Overtime Pay During Ramadan

Overtime pay in Ramadan follows the same rules as regular overtime. The rate depends on when the extra work is done.

1. Overtime on Normal Working Days

If an employee works extra hours on a normal workday, they should be paid 1.5 times their hourly rate.

2. Overtime on Rest Days (Weekend Work)

The pay rate for working on a rest day depends on how many hours are worked:

Less than half the normal working hours → 0.5 times the hourly rate
More than half but not exceeding normal hours → 1 times the hourly rate
More than normal hours → 2 times the hourly rate

3. Overtime on Public Holidays (e.g., Hari Raya Aidilfitri)

If employees work on a public holiday, they get a higher overtime rate:

Within normal working hours → 2 times the hourly rate
Beyond normal working hours → 3 times the hourly rate

4. Overtime for Night Shifts During Ramadan

Some employees work night shifts, especially in retail, food services, or security.

Employers may offer extra allowances for working late, such as an additional RM50 per night on top of the overtime pay.

Example Calculation for Overtime Pay During Ramadan

Naim is an employee earning RM2,600 per month. To calculate his overtime pay, we first need to find:

Daily wage = RM2,600 ÷ 26 days = RM100 per day
Hourly wage = RM100 ÷ 8 hours = RM12.50 per hour

Now, we will apply this to different overtime scenarios during Ramadan.

1. Overtime on a Normal Workday (Monday - Friday)

Naim works two extra hours after his normal shift on a regular workday. Overtime pay is 1.5 times his hourly rate.

Calculation: RM12.50 × 1.5 × 2 hours = RM37.50 overtime pay

2. Overtime on a Rest Day (Saturday/Sunday)

Naim comes to work on his rest day and works four hours. The first half of his shift (up to 4 hours) is paid at 0.5 times his hourly rate, while the remaining hours are paid differently.

Scenario 1: Naim works 4 hours on a rest day

Since this is half of his normal shift, he is paid 0.5 times his daily wage.

Calculation: RM100 × 0.5 = RM50 overtime pay

Scenario 2: Naim works 8 hours on a rest day

Since this is a full workday, he is paid 1 times his daily wage:

Calculation: RM100 × 1 = RM100 overtime pay

Scenario 3: Naim works 10 hours on a rest day

The first 8 hours are paid as a full day’s wage. The extra 2 hours beyond the normal shift are paid at 2 times his hourly rate.

Calculation: (RM100 × 1) + (RM12.50 × 2 × 2 hours) = RM100 + RM50 = RM150 overtime pay

3. Overtime on a Public Holiday (e.g., Hari Raya Aidilfitri)

Naim is asked to work 10 hours on Hari Raya.

The first 8 hours are paid at 2 times his hourly rate
The extra 2 hours beyond his normal shift are paid at 3 times his hourly rate

Calculation:

(RM12.50 × 2 × 8 hours) + (RM12.50 × 3 × 2 hours) = (RM12.50 × 16) + (RM12.50 × 6) = RM200 + RM75 = RM275 overtime pay

Total Overtime Pay Example

If Naim worked the following extra hours in one month during Ramadan:

2 hours on a normal workday → RM37.50
4 hours on a rest day → RM50
10 hours on a public holiday → RM275

His total overtime pay for the month would be:

RM37.50 + RM50 + RM275 = RM362.50

Employer Responsibilities for Overtime Work During Ramadan

Employers have to manage overtime properly and create fair working conditions for employees during Ramadan.

1. Adjusting work hours for fasting employees

Although there is no law requiring shorter hours, employers can adjust schedules to help fasting employees. This could mean starting work earlier or offering flexible shifts.

2. Paying fair overtime wages

Overtime pay must follow legal rates. Employers should keep proper records of work hours and payments to avoid disputes or legal issues.

3. Giving enough breaks for meals and rest

Employees who work overtime past Iftar should have time to eat and rest. Businesses can schedule shifts so employees can break their fast properly before continuing work.

4. Limiting excessive overtime

Too much overtime can affect employee health and performance. Employers should avoid overloading workers and distribute extra hours fairly among staff.

FAQ

Are employers required to reduce working hours for Muslim employees during Ramadan?

No, but some businesses adjust work hours to support fasting employees.

Can employees refuse to work overtime during Ramadan?

If an employee’s contract does not require overtime, they can say no. However, if overtime is part of their job agreement, refusing may go against their contract.

What happens if an employee works overtime past Iftar?

They should be given time to break their fast and eat before continuing work. Employers can plan shift schedules to allow this.

Do employers need to provide meal allowances for employees working overtime at night?

It is not required by law, but some companies offer meal allowances as a benefit for employees working night shifts.

Are there special overtime rates for Ramadan?

No, overtime pay rates during Ramadan follow the same rules as usual. However, some companies give extra allowances for late-night shifts.

Now you know how to calculate overtime pay. Make sure to keep track of all your employees' overtime hours.

This way, you can calculate their pay correctly based on the official overtime pay regulations and avoid any mistakes.

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