How to Calculate Overtime Pay During Chinese New Year 2025

Chinese New Year is one of the most important and joyful holidays in Malaysia.

While many businesses close to celebrate, some still need to operate, and employees may be required to work during this festive season.

For those who do, fair overtime pay is not only a legal obligation under Malaysian labor laws but also a meaningful way for employers to show appreciation.

The Employment Act of 1955 outlines clear rules for paying employees who work on public holidays like Chinese New Year.

Calculating overtime pay correctly helps employers follow the law while maintaining good relationships with their staff.

This article provides a simple guide to calculating overtime pay during Chinese New Year 2025, complete with examples to make the process easy to understand.

Let’s read the explanation below!

Overtime Pay Regulations in Malaysia during Chinese New Year 2025

Overtime work in Malaysia is any work done beyond an employee’s usual hours.

During public holidays like Chinese New Year, the rules are stricter to ensure employees are compensated fairly.

According to the Employment Act 1955, Chinese New Year is a gazetted public holiday, meaning it is officially recognized, and employees working on this day are entitled to higher pay.

Here’s what employers need to know:

Double pay (2x) applies to hours worked during the regular working schedule on a public holiday.
Triple pay (3x) applies to overtime hours beyond the regular working hours on a public holiday.

Employers who fail to follow these rules may face penalties and risk damaging their reputations.

Overtime Pay Rates during CNY 2025

To calculate overtime pay, employers need to understand how the rates work. Let’s break it down:

1. Regular Overtime Pay

For normal working days, employees get 1.5 times their hourly pay for overtime hours. This applies if they work more than 8 hours in a day or 45 hours in a week.

2. Overtime Pay on Public Holidays

During public holidays like Chinese New Year:

Employees working within their normal hours must receive double their hourly pay (2x).
Employees working overtime beyond their normal hours must receive triple their hourly pay (3x).

Who is Eligible for OT during CNY?

In Malaysia, overtime pay is regulated by the Employment Act 1955, which applies to:

Employees earning RM4,000 and below per month.
Manual workers, regardless of their salary.

Employees outside these categories are generally governed by their contracts or company policies.

How to Calculate Overtime Pay During Chinese New Year

Here’s a step-by-step guide to calculating overtime pay:

1. Determine Employee’s Hourly Rate

To calculate overtime pay, first, figure out the employee’s hourly rate using this formula:

Hourly pay = Monthly salary ÷ 26 days ÷ number of working hours per day

For example:

If an employee earns RM3,000 per month and works 8 hours a day:

Daily pay: RM3,000 ÷ 26 = RM115.38
Hourly pay: RM115.38 ÷ 8 = RM14.42

2. Calculate the Overtime Rate for Public Holidays

Use the hourly pay to calculate the rates for public holiday work:

For double pay (2x): RM14.42 × 2 = RM28.84 per hour.
For triple pay (3x): RM14.42 × 3 = RM43.26 per hour (for hours beyond regular working time).

3. Total Overtime Pay Calculation

Multiply the overtime hours by the applicable rate. For example, an employee works 4 extra hours during Chinese New Year:

First 8 hours (normal work): RM14.42 × 2 = RM28.84 per hour × 8 = RM230.72
Additional 4 hours (overtime): RM14.42 × 3 = RM43.26 per hour × 4 = RM173.04
Total pay for the day: RM230.72 + RM173.04 = RM403.76

The examples and steps in this article simplify the process of calculating overtime pay, helping employers handle payroll accurately during Chinese New Year 2025.

Treating employees fairly during this festive season not only follows the rules but also builds a positive work environment.

Happy Chinese New Year! Wishing everyone a year full of happiness and success!

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