Overtime Allowance

Overtime Allowance (OTA) is the hourly allowance paid to a central government employee for authorised work beyond the normal office hours. It was abolished with effect from 1 July 2017 for every category except operational staff and industrial employees governed by statutory provisions, by Department of Personnel and Training Office Memorandum No. A-27016/03/2017-Estt.(AL) dated 19 June 2018, and for the retained categories the hourly rates remain those fixed by Office Memorandum No. 15012/3/86-Estt.(Allowance) dated 19 March 1991.

Two figures set the scale of what was withdrawn. Gross central government expenditure on OTA rose from Rs. 797 crore in 2006-07 to Rs. 1,629 crore in 2012-13, and over 90% of it sat in two ministries, Railways and the civilian side of Defence. Against that, the Committee on Allowances recorded the staff side putting the paid rate for one hour of overtime at Rs. 15.85 while one hour’s wage of a Multi Tasking Staff stood at Rs. 75.

Abolition from 1 July 2017 and the order that carries it

OTA stands abolished from 1 July 2017 for all central government employees other than operational staff and industrial employees governed by statutory provisions. The decision was taken by the Cabinet on 28 June 2017 and published through Department of Expenditure Resolution No. 11-1/2016-IC dated 6 July 2017 on the 7th Central Pay Commission recommendations on allowances. The operating instructions followed a year later, in Department of Personnel and Training Office Memorandum No. A-27016/03/2017-Estt.(AL) dated 19 June 2018, which is the order a drawing and disbursing officer works from today.

The order does three things. It discontinues OTA for every category except the two retained ones; it leaves the hourly rates untouched, so the rates of the Office Memorandum of 19 March 1991 continue; and it ties each payment to a written direction and to biometric attendance.

For the ministerial and clerical staff who make up most of the central secretariat and the field offices, the practical effect is that no cash payment attaches to staying late. A department may grant compensatory leave for genuine extra work under its own instructions, and that is the whole of what is available.

The four commissions that recommended abolition before the 7th

Abolition was recommended four times before it happened. Paragraph 8.17.96 of the 7th Central Pay Commission report records that the 3rd, 4th, 5th and 6th Central Pay Commissions each recommended that OTA be abolished except where it is a statutory requirement, and that despite those recommendations OTA continued to be paid to certain categories of staff, at rates the Commission described as quite old, even where no statute required it.

The 7th Central Pay Commission reached the same conclusion at paragraph 8.17.97, and framed it as a productivity question rather than a cost one:

while this Commission shares the sentiments of its predecessors that government offices need to increase productivity and efficiency, and recommends that OTA should be abolished (except for operational staff and industrial employees who are governed by statutory provisions), at the same time it is also recommended that in case the government decides to continue with OTA for those categories of staff for which it is not a statutory requirement, then the rates of OTA for such staff should be increased by 50 percent from their current levels.

Paragraph 8.17.98 adds one line: stricter control on OTA expenditure is also suggested. The 50% fallback at paragraph 8.17.97 is the part the government did not take up, and the reason it did not is examined below under the rates.

OTA expenditure the Commission examined

The 7th Central Pay Commission found at paragraph 8.17.91 that over 90% of the total central government expenditure on OTA in 2012-13 was accounted for by two ministries alone, the Ministry of Railways and the civilian establishment of the Ministry of Defence, and it compared the two over seven years.

OTA expenditure in Rs. crore, from the chart at paragraph 8.17.92 of the 7th Central Pay Commission report, November 2015. Figures are as printed in the report and are rounded to the nearest crore.

Paragraph 8.17.93 sets the same amounts against pay. In the Ministry of Railways, OTA of Rs. 304.88 crore against pay including dearness allowance of Rs. 14,563.01 crore in 2006-07 was 2.09%, and Rs. 791.65 crore against Rs. 30,713.98 crore in 2012-13 was 2.58%. In Defence civilian establishments the same ratio fell, from 7.91% to 6.54%. The number that decided the argument is the growth rate: the compound annual growth rate of OTA in the Railways over that period was 17.24%, against 13.24% for pay, so OTA was rising faster than the pay it was calculated on, and the Commission said at paragraph 8.17.95 that the efforts of the Ministry of Railways to control it had not yielded the desired results.

Operational staff: the definition and the departmental list

Operational staff are defined in paragraph 1 of Office Memorandum No. A-27016/03/2017-Estt.(AL) dated 19 June 2018 as all non-ministerial, non-gazetted central government servants directly involved in the smooth operation of the office, including those tasked with the operation of some electrical or mechanical equipment. Three limbs of that definition carry the whole eligibility test.

• Non-ministerial. Clerical and secretariat staff, whose work is ministerial, are excluded. The category is aimed at the staff who run the physical operation of an office, not at those who process its paper.
• Non-gazetted. Gazetted officers are outside OTA altogether, so the gazetted and non-gazetted line governs eligibility here as it does for most extra-duty payments.
• Directly involved in smooth operation, including the operation of electrical or mechanical equipment. This limb brings in staff car drivers, electricians, lift operators, machine operators, caretakers and similar staff.

No central list of eligible categories exists. The Committee on Allowances required at paragraph 3.6.8 of its report of 27 April 2017 that all ministries and departments prepare a list of those coming under the category of operational staff on their rolls and pay OTA at the applicable rates, and the 2018 Office Memorandum carries that requirement forward against the common definition. Whether a given category draws OTA therefore depends on the list its own ministry has prepared and approved.

The Department of Posts list as a worked example

The Department of Posts list shows what a ministry list looks like in practice. Order F. No. 52-01/2018-PAP dated 8 July 2020, issued with the concurrence of the Integrated Finance Wing and approved by the Secretary (Posts), identifies 22 cadres as operational staff: Multi Tasking Staff, Lift Operator, Wireman, Assistant Wireman, Operator (E and M), Assistant Operator (E and M), Electrician, Care Taker, Mail Motor Service Driver, Staff Car Driver, Driver of Inspection Vehicles, Technician, Artisan, Postal Machinery Assistant, Postman, Mail Guard, Sorting Assistant, Postal Assistant in a post office, Postal Assistant in the Savings Bank Control Organisation, and the Lower Selection Grade supervisors in the Postal, Railway Mail Service and Savings Bank Control Organisation streams.

The same order carries an exclusion worth noting, because it is the kind of overlap that produces a recovery later: an employee drawing double duty allowance is not entitled to claim OTA for the same period, and OTA is not to be granted to a member of the operational staff who is receiving double duty allowance in lieu of double duty.

The list took two years to settle. The Department of Posts circulated the Department of Personnel and Training order under its letter F. No. 52-01/2018-PAP dated 4 July 2018, and by 22 January 2019 was still directing Chief Postmasters General, the Circle heads, the Postal Training Centres and the Army Postal Service to prepare a list with full justification against the parameters and submit it by 4 February 2019. The order of 8 July 2020 is the settled outcome of that exercise.

The rates, frozen since 19 March 1991

The rates of OTA are the hourly rates prescribed by Department of Personnel and Training Office Memorandum No. 15012/3/86-Estt.(Allowance) dated 19 March 1991, and they have not been revised since. Answering Lok Sabha Unstarred Question No. 2775 on 5 August 2026, Dr. Jitendra Singh, Minister of State in the Ministry of Personnel, Public Grievances and Pensions, stated that the department had prescribed the hourly rates of OTA through that Office Memorandum, and that on the decision taken by the Department of Expenditure on the recommendations of the Pay Commissions, the rates have not been revised. The same rates run for office staff, staff car drivers and operative staff.

The freeze was a deliberate choice between two options the 7th Central Pay Commission put on the table. Paragraph 8.17.97 offered a 50% increase if the allowance were continued for non-statutory categories. Paragraph 3.6.8 of the Committee on Allowances report of 27 April 2017 took the other route: given the rise in pay over the years, discontinue OTA for the categories other than operational staff and statutory industrial employees, require every ministry to list its operational staff, and leave the rates unrevised with payment strictly linked to biometric attendance. The Cabinet accepted that on 28 June 2017, and the summary of the Committee’s own recommendations records the item as OTA rates may not be revised upwards.

Two demands the Committee heard and rejected fix how far the rates have fallen behind. The Department of Posts asked that the allowance continue with the rate raised to Rs. 100 per hour for a maximum of three hours in a day, linked to dearness allowance. The National Council (Staff Side) of the Joint Consultative Machinery told the Committee that the rates had last been revised in 1987, that one hour’s wage of a Multi Tasking Staff after the 7th Central Pay Commission was Rs. 75 while the rate for one hour of OTA was Rs. 15.85, and asked that OTA be computed on the actual basic pay of the entitled employee at twice the hourly rate. Neither demand was accepted, and the Rs. 15.85 figure is what an hour of authorised overtime is still measured against.

Conditions: written direction and biometric attendance

Even inside a retained category, OTA is not automatic, and two conditions gate every payment. A senior officer must direct the employee in writing to stay in office to attend to work of an urgent nature, so overtime worked on the employee’s own initiative earns nothing. Payment is then linked to biometric attendance where such a system is already in operation, and where it is not, the existing checks and balances continue and the system is to be made operational as early as possible.

The biometric condition is the Committee on Allowances contribution rather than the Commission’s. Paragraph 3.6.8 of the report of 27 April 2017 recommends in terms that the payment be strictly linked to biometric attendance, and the parliamentary answers on OTA since 2018 have repeated it. The effect is documentary: extra hours that were neither authorised in advance in writing nor captured in the attendance record are not payable, whatever the register or the log says.

Staff car drivers are the standing exception, because their duty takes them away from the terminal. Department of Posts order F. No. 52-01/2018-PAP dated 8 July 2020 records that drivers are covered by the biometric system where one is available, since designated parking is normally allotted within the office premises, but that where the parking is outside the office building, or where an official exigency prevents a return to the building holding the terminal, the calculation is done from the log book duly verified by the officer concerned.

Statutory overtime that railway and factory employees keep

The abolition reached only the administrative OTA that rested on executive orders, and it left every statutory overtime entitlement standing. That is why the 2018 Office Memorandum retains OTA for industrial employees who are governed by statutory provisions, and the phrase points at two different rule sets.

For railway servants the source is the Railway Servants (Hours of Work and Period of Rest) Rules, 2005, made under Section 136 of the Railways Act, 1989. Rule 10 prices overtime on the ordinary rate of pay defined in rule 2(d), which for running staff includes the 30% pay element along with dearness allowance and any compensatory city allowance, and rule 11 requires every hour of extra work beyond the rostered hours to be entered in a register in Form A maintained by an officer authorised by the Head of the Railway Administration. Railway overtime therefore moves with current pay, which is the opposite of a frozen hourly figure, and it is the reason railway expenditure on OTA grew faster than railway pay. The Railway Board applied the 7th Central Pay Commission decision through letter No. PC-V/2017/A/OTA/1, and by RBE No. 41/2018 dated 20 March 2018 antedated the basic pay and dearness allowance element of the OTA emoluments to 1 January 2016 while holding the remaining elements, house rent allowance and transport allowance among them, at revised rates from 1 July 2017. The running-staff position is stated on the allowance side as well: rule 924(i)(j) of the Rules for the Payment of Running and Other Allowances to the Running Staff on the Railways, in force from 1 August 1981, lists overtime allowance among the eleven purposes for which the 30% pay element is treated as pay. One head of railway overtime arises only for running staff. Rule 909(ii) of the same rules pays a breach of mandatory rest as overtime allowance under the Hours of Employment Regulations, at 2 hours for every hour by which the rest falls short of the prescribed period, the thresholds being 16 hours at headquarters after a duty spell of 8 hours or more and 12 hours after a shorter spell, as revised by Railway Board letter No. 2014/E(P&A)II/HPC Report dated 18 November 2016, RBE No. 135/2016. The rest of the running-staff entitlements are dealt with separately, through the running allowance and the pay element described in the article on the loco pilot’s salary.

For workers in a departmental factory the source is Section 59 of the Factories Act, 1948, which entitles a worker who works beyond the daily or weekly hours the Act fixes to wages at twice the ordinary rate. The industrial employees of the ordnance factories, the railway workshops, the government presses and the mints draw their overtime on that footing, and an executive Office Memorandum cannot take away a right that a statute confers.

Section 14 of the Code on Wages, 2019

Section 14 of the Code on Wages, 2019 fixes overtime at not less than twice the normal rate of wages, and the four labour codes were brought into force on 21 November 2025. That raised an obvious question for a central government employee still being paid an hourly rate set in 1991, and the question was put directly.

Lok Sabha Unstarred Question No. 2775, answered on 5 August 2026, asked whether OTA paid to non-gazetted central government employees is computed at the Section 14 rate of not less than twice the normal rate of wages, since the Code was implemented on 21 November 2025. The Department of Personnel and Training did not apply the Code. Its answer stated that OTA to eligible non-gazetted central government employees is regulated as per the recommendations of the respective Pay Commissions, named Office Memorandum No. A-27016/03/2017-Estt.(AL) dated 19 June 2018 as the recent order on the subject, and added that any decision on allowances including OTA is taken by the Department of Expenditure on the recommendations of the Pay Commission.

Read against the statutory-minimum-wage track described in the article on the Aykroyd formula, the answer places central government OTA inside the pay-commission machinery rather than inside the wage code, and the same reply disposed of the third limb of the question, on extending OTA to gazetted officers, without disclosing any proposal.

Compensatory leave in place of cash overtime

Compensatory leave is what a non-operational employee gets for authorised work beyond office hours, or on a Sunday or a gazetted holiday, and it is granted under departmental instructions rather than under the OTA order. The employee earns a day of leave to be availed later instead of a payment.

Compensatory leave is time and not money, and the difference shows up in four places: it does not appear on the pay slip, it carries no dearness allowance, it is governed by the leave and attendance rules of the department rather than by the Office Memorandum of 19 June 2018, and the quantum, the period within which it must be availed and the sanctioning authority vary between offices. Where a duty on a closed holiday is paid for in cash rather than leave, the payment is the national holiday allowance and not OTA.

For an employee on an operational staff list the two are alternatives for the same hours. Either the frozen-rate OTA is drawn where both conditions are met, or compensatory off is granted, never both for the same work.

Where OTA sits among the other extra-duty payments

OTA pays for extra hours on the same duties, and that is what separates it from the payments it is most often confused with. It is distinct from the night duty allowance, which compensates the timing of duty performed between 22:00 and 06:00 rather than its length and which was revised rather than abolished. It is distinct from an honorarium, which rewards work of a different character under FR 46(b) and needs a sanction in each case. It is distinct from the Extra Work Allowance, the flat 2% of basic pay into which the 7th Central Pay Commission absorbed seven small extra-duty allowances, and from the double duty allowance that the Department of Posts order treats as mutually exclusive with OTA. It sits within the wider rationalisation described in the article on the abolished allowances of the 7th CPC, one of the 53 allowances recommended for abolition and one of the 12 the Committee on Allowances reopened.

Tax treatment under the Income-tax Act, 2025

OTA is fully taxable. It is salary under Section 16(a) of the Income-tax Act, 2025, which includes wages in the definition, and it is chargeable under Section 15(1)(a) in the tax year in which it becomes due, at the applicable slab rate, with tax deducted at source by the drawing and disbursing officer.

No exemption reaches it. Rule 280 of the Income-tax Rules, 2026 prescribes the allowances exempt under serials 12 and 13 of Schedule III to the Act, covering travel and transfer, daily charges on tour, conveyance, a helper, academic pursuits, uniform and the location and hardship allowances, and overtime appears nowhere in either list. The treatment is the same in the old and the default regimes, and it is set out alongside the other salary heads in the article on income tax for government employees.

The demand for revision and the 8th Central Pay Commission

The rate freeze is a standing demand and has been raised for the 8th Central Pay Commission to examine. An hour of authorised overtime for an operational staff member is priced on a schedule issued on 19 March 1991, while the pay it stands beside has been revised by the 6th and the 7th Central Pay Commissions since. Staff associations have asked for a revision of the rates and, in the alternative, a compensatory mechanism keyed to actual pay, which is the Rs. 100 an hour and the twice-the-hourly-rate demands the Committee on Allowances heard and rejected in 2017.

What the 8th Central Pay Commission will do cannot be stated. No revised rate, no widened category and no restoration for ministerial staff exists until that commission reports and its recommendations are accepted by the government. Until then the position is the one above: OTA abolished from 1 July 2017 for all but operational staff and statutory industrial employees, hourly rates unrevised since 19 March 1991, written direction and biometric attendance on every claim, statutory overtime untouched for railway and factory employees, and compensatory leave for everyone else.

Related Articles

• Night duty allowance
• Abolished allowances of the 7th CPC
• Committee on Allowances
• Industrial employees
• Factories Act, 1948
• Code on Wages, 2019
• Running allowance
• Loco pilot salary
• Honorarium
• Extra Work Allowance
• Compensatory off
• National holiday allowance
• Gazetted and non-gazetted officers
• Multi Tasking Staff
• Department of Posts
• Transport allowance
• Basic pay
• Dearness allowance
• Allowances for central government employees
• Department of Personnel and Training
• Department of Expenditure
• 7th Central Pay Commission
• 8th Central Pay Commission
• Income-tax Act, 2025
• Income tax for government employees
• Central government employees in India
• Aykroyd formula
• Minimum pay
• Ad hoc bonus (non-PLB)
• Productivity Linked Bonus
• Take-home salary for central government employees
• Pay matrix

External references

• Department of Personnel and Training
• Department of Expenditure
• Committee on Allowances report, 27 April 2017
• Ministry of Labour and Employment
• Lok Sabha
• Ministry of Railways
• Income Tax Department

References

1. Department of Personnel and Training, Office Memorandum No. A-27016/03/2017-Estt.(AL) dated 19 June 2018, “Grant of Overtime Allowance (OTA) to Central Government employees, decision on the recommendations of the Seventh Central Pay Commission” (OTA discontinued except for operational staff and statutory industrial employees with effect from 1 July 2017; paragraph 1 definition of operational staff; ministries to prepare their own lists; rates not revised; biometric-attendance and written-direction conditions).
2. Department of Personnel and Training, Office Memorandum No. 15012/3/86-Estt.(Allowance) dated 19 March 1991 (hourly rates of Overtime Allowance for office staff, staff car drivers and operative staff, which continue to apply to the retained categories).
3. Lok Sabha, Unstarred Question No. 2775, “Overtime Allowance under the Code on Wages, 2019”, answered on 5 August 2026 by Dr. Jitendra Singh, Minister of State in the Ministry of Personnel, Public Grievances and Pensions (OTA regulated by Pay Commission recommendations; the 1991 Office Memorandum prescribed the hourly rates; rates not revised; decisions on allowances taken by the Department of Expenditure).
4. Report of the Committee on Allowances, 27 April 2017, paragraph 3.6.8 (discontinuation accepted for categories other than operational staff and statutory industrial employees; every ministry to list its operational staff; rates not to be revised; payment strictly linked to biometric attendance; the Department of Posts and Joint Consultative Machinery demands recorded).
5. Report of the Seventh Central Pay Commission, November 2015, paragraphs 8.17.91 to 8.17.98 (OTA expenditure in the Ministries of Railways and Defence from 2006-07 to 2012-13; recommendation to abolish OTA except for operational staff and statutory industrial employees, with a 50% increase in rates if continued for other categories; stricter expenditure control).
6. Ministry of Finance, Department of Expenditure, Resolution No. 11-1/2016-IC dated 6 July 2017 on the recommendations of the Seventh Central Pay Commission on allowances (Cabinet decision of 28 June 2017 to discontinue OTA for categories other than operational staff and industrial employees governed by statutory provisions).
7. Ministry of Communications, Department of Posts, Order F. No. 52-01/2018-PAP dated 8 July 2020 (list of 22 operational staff cadres approved by the Secretary (Posts); staff car driver log-book fallback; exclusion of employees drawing double duty allowance).
8. Railway Servants (Hours of Work and Period of Rest) Rules, 2005, made under Section 136 of the Railways Act, 1989, rules 2(d), 10 and 11 (ordinary rate of pay, averaging of overtime, and the Form A register).
9. The Factories Act, 1948, Section 59 (overtime wages at twice the ordinary rate of wages, the statutory basis for overtime for covered industrial employees).
10. Code on Wages, 2019 (Act 29 of 2019), Section 14 (overtime at not less than twice the normal rate of wages); the labour codes were brought into force on 21 November 2025.
11. Income-tax Act, 2025, Sections 15(1)(a) and 16(a), and Income-tax Rules, 2026, rule 280 (overtime chargeable as salary in full, and absent from the prescribed exempt allowances under serials 12 and 13 of Schedule III).