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Overhang seats can occur in mixed-member-proportional systems, where voters have a primary vote for specific candidates and secondary vote for political party lists. The secondary vote defines how many seats the party is entitled to have in the legislature. If the primary vote share is higher than the secondary vote share, or vice versa, those are known as overhang seats.
A political party gets 500,000 votes from the secondary vote, which would amount to 50 seats in the parliament. Yet through the primary vote, where the electorate votes for specific candidates, the political party receives 60 seats. The surplus of 10 seats are known as the overhang seats.