Overtime, Late Marks and Fines: How to Write a Fair Attendance Policy in India
How to set grace minutes, late marks, half days, fines and overtime pay that are fair, legal and easy to calculate — with formulas, examples and the limits Indian labour law sets.
pagar karo Payroll Desk· Published 18 Aug 2026· Updated 28 Oct 2026· 3 min readA fair policy sets a grace period (often 10–15 minutes), converts repeated late marks into a half-day or a small fine, and pays overtime at twice the ordinary hourly rate for work beyond normal hours. Hourly rate = monthly wages ÷ days in the month basis ÷ shift hours. Fines must be for acts listed in an approved notice and, under wage law, are capped at 3% of wages for the wage period.
- Write the rules down and show them to staff before applying them.
- Overtime: at least 2× the ordinary rate of wages.
- Fines: only for notified acts, capped at 3% of wages for the wage period.
- Send late marks and overtime for approval before they reach payroll.
Why a written policy matters
Most month-end arguments are about minutes: who was late, by how much, and whether staying back counts as overtime. A short written policy — applied automatically and the same way for everyone — ends those arguments.
Grace minutes and late marks
| Rule | Common setting |
|---|---|
| Grace period | 10–15 minutes after shift start |
| Late mark | Punch after the grace period |
| Half day | 3 late marks in a month = 0.5 day LOP, or arriving more than 2 hours late |
| Early going | Same rules mirrored at shift end |
Fines: what the law allows
- Fines can be imposed only for acts or omissions specified in a notice approved under the law and displayed to workers.
- The employee must be given a chance to explain.
- Total fines in a wage period cannot exceed 3% of wages for that period.
- Keep a register of fines and use the money only as the law allows.
Overtime pay
Under the Labour Codes, work beyond normal hours must be paid at at least twice the ordinary rate of wages.
Example: ₹26,000 a month, 26-day basis, 8-hour shift → daily ₹1,000, hourly ₹125, overtime ₹250 an hour. Two hours of approved overtime adds ₹500.
Practical overtime rules
- Minimum overtime block (e.g. count only after 30 minutes extra).
- Round down to 15 or 30 minutes.
- Holiday and weekly-off work: overtime or comp-off — pick one per template.
- Daily overtime caps as your state rules require.
Approvals before payroll
Let the system create late marks and overtime from punches, then send them to the reporting manager. Approved items go to payroll; rejected ones don’t. This one step removes most disputes, because the manager — not HR — decides on their own team.
In pagar karo
- Grace, late, half-day, early-out and overtime rules on the attendance template.
- Fines and overtime priced from each person’s salary on the rate base you choose.
- Bulk approve or pardon on web or mobile; only approved items reach payroll.
- Overtime compliance and fine reports for audits.
Frequently asked questions
How is overtime calculated for a monthly salaried employee?
Hourly rate = (monthly wages ÷ month basis days) ÷ daily shift hours. Overtime pay = overtime hours × hourly rate × 2. For ₹26,000 a month, 26-day basis and 8-hour shifts, the hourly rate is ₹125 and one overtime hour pays ₹250.
Can I deduct salary for late coming?
You can treat repeated lateness as a half-day or apply a fine if your rules allow it and are communicated, but fines are limited by wage law. Many employers prefer half-day conversion after several late marks.
Should overtime be approved?
Yes. Automatic overtime from punches is a good starting point, but a supervisor should approve it so that staying back without work isn’t paid.
This guide is general information for employers in India, checked against the sources above on 28 Oct 2026. Rules and rates change — confirm with your CA or the official notification before acting.