Overtime pay compensates an employee, at a rate above their normal hourly rate, for time worked beyond their ordinary hours as defined in the Basic Conditions of Employment Act (BCEA) or an applicable sectoral determination.
What it means
The BCEA sets the floor: at least one-and-a-half times the employee's normal hourly rate for overtime on an ordinary working day, and different rates for Sundays and public holidays. A contract or collective agreement can be more generous than the BCEA minimum, but never less.
Where it fits in
Overtime is calculated from the employee's normal hourly rate - itself usually derived from basic salary - and added into gross remuneration for the period it was worked. It is fully taxable through PAYE like any other earnings, with no special exemption for the premium portion.
Key rules
- BCEA minimum is 1.5x the normal rate on an ordinary day; higher rates apply to Sundays and public holidays.
- Only employees earning below the BCEA earnings threshold are automatically covered - higher earners may be excluded by contract.
- Calculated from the employee's normal hourly rate, which is usually basic salary divided down to an hourly figure.
- Fully included in taxable income - there is no PAYE exemption for the overtime premium.
