- By Admin
- 10/13/2026 12:23:00
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Overtime Pay India: Track and Cost by Project
When overtime rules change, the first question is what employees will earn. The second, for firms that bill clients by the hour, is who pays. Business Today's April 2026 explainer on overtime under the new wage code puts both on the table.
Whether overtime pay rises is a concern for Indian IT and engineering firms that bill for client hours. Overtime that is worked, paid and not recovered from the client becomes a direct cost to the firm. Overtime that is worked and not recorded becomes a compliance risk.
This article explains how operations and HR managers can track overtime accurately, cost it per project and decide how to recover it commercially. Rules should be confirmed for your state and sector; this is general guidance and not legal advice.
Key takeaways
- Business Today's April 2026 explainer addresses whether overtime pay rises under the new wage code.
- Overtime that is worked but not recorded is a compliance and cost risk.
- Costing overtime per project shows which contracts absorb it.
- Client contracts should state how overtime is billed or covered.
- Confirm the applicable rules for your state and sector with an adviser.
Why this matters right now in India
Indian IT and engineering delivery often depends on extended hours to meet client deadlines or time-zone overlaps. These hours are frequently recorded loosely or not at all. A change in how overtime is calculated or paid brings them into sharper focus.
For firms working on fixed-price or capped contracts, overtime cost cannot be passed on. For time-and-material contracts, it can be billed only if it is documented and agreed. In both cases, project-level data on overtime hours and cost is essential.
What it means for operations and HR managers in Indian IT and engineering firms
Operations managers need to see where overtime concentrates, by project, team and client. HR managers need accurate records to pay correctly and respond to queries. Both benefit from approvals that show overtime was authorised and from reports that compare overtime cost with project budgets.
Three practical implications for your firm
Record every extra hour
Capture hours above standard working time with approvals so overtime is accurate and authorised.
Cost overtime by project
Apply the correct overtime rate and allocate cost to the project and client concerned.
Align contracts and billing
Check that client agreements say how overtime is billed or absorbed, and compare actual cost with the commercial position.
Spreadsheets, point tools, or a connected platform
| Capability | Spreadsheets | Point tools | Arcprojects.io |
|---|---|---|---|
| Overtime recording | Informal or missing | Hours captured, no overtime logic | Standard hours, overtime flags and approvals |
| Overtime cost per project | Calculated in payroll only | Not linked to projects | Overtime cost against project budgets |
| Client billing of overtime | Assembled manually | Separate invoice tool | Billable overtime flows into the invoice |
| Link to invoicing | Re-keyed by hand | Separate billing tool required | Approved time and expenses flow straight into the invoice |
| Audit trail | Fragile and version-dependent | Partial, split across tools | Full approval and change history retained |
| Total cost of ownership | Hidden in admin hours | Several subscriptions to maintain | One platform, one subscription |
How Arcprojects.io helps
Arcprojects.io timesheets with project costing show overtime cost against project budgets. Indian firms can see overtime hours, apply costing rules and compare the effect on margin, with amounts in rupees.
- Define standard hours and overtime rulesConfigure working patterns, overtime thresholds and approval rules for each team or location.
- Capture hours and approvalsEmployees log hours against projects, and managers approve overtime before it is final.
- Cost and review by projectReport overtime hours and cost per project and client, and use the results in billing and planning decisions.
Know what overtime costs on each project
See timesheets with project costing for Indian IT and engineering firms.
Request a demo"Overtime you cannot see is overtime you cannot bill, cost or defend."
"We always knew teams worked late, but we could not show how much, on which projects. Once overtime was recorded and costed we could explain one project's margin and renegotiate its support hours."
Operations manager's overtime checklist
- Confirm the overtime rules that apply in your state and sector.
- Define standard working hours for each role.
- Record and approve overtime in your timesheet system.
- Cost overtime per project and client.
- Compare overtime cost with project budgets.
- Review client contracts for overtime billing terms.
- Identify teams or projects with persistent overtime.
- Report overtime trends to leadership monthly.
Frequently asked questions
How is overtime calculated under the wage code?
The calculation depends on the Code, state rules and the employee's wage. Check the current provisions with a labour law adviser; the Code on Wages provides for overtime at a higher rate than normal wages. Further reading: Business Today.
Is there overtime tracking software for India?
Yes. Look for software that records hours with overtime rules and approvals, allocates cost to projects and works on mobile. Further reading: Business Today.
What is an employee timesheet app for India?
It is a mobile or web app where employees log hours against projects and tasks, with approvals and reports for payroll, billing and compliance. Further reading: Business Today.
Make overtime visible
Overtime rules may change, but the discipline does not: record it, approve it and cost it against the project. Firms that do will know where margin is going and have evidence for every conversation.
Arcprojects.io brings timesheets, expenses, leave, invoicing, resource planning, cost control and profitability reporting into one platform. Explore how the modules fit together on the features and benefits page, see which firms use it at who uses Arcprojects, or review pricing. You can also start a 30-day free trial and test it on one live project before you commit.