How to compute overtime pay in the Philippines? Justice and equality must be served in the workplace. That is why our Labor Code has fixed the maximum hours and days of work, which is equivalent to a maximum of eight (8) hours a day (Article 83, Labor Code of the Philippines) for six consecutive work days (Article 91, LCP). Furthermore, the Labor Code also requires employers to pay certain employees an additional compensation equivalent to their regular wage plus at least twenty-five (25%) of their works beyond eight hours. That rate is increased to thirty percent (30%) if the worker renders overtime on a holiday or rest day. (Article 87, LCP). This additional compensation for work performed beyond eight hours a day is what we called Overtime Pay. The following are the applicable laws and guidelines on the computation of Overtime Pay in the Philippines.
Who are covered by the OT pay?
All employees in all establishments and undertakings whether for profit or not are entitled to overtime pay for work rendered beyond eight (8) hours. But this does not apply to managerial employees, field personnel, members of the family of the employer who are dependent on him for support, domestic helpers, persons in the personal service of another, and workers who are paid by results. Employees in the government are also entitled to overtime pay but they are governed by Civil Service laws and rules. Only employees in the private sector are covered by the Labor Code.
Special rules for health personnel
For health personnel in (1)cities and municipalities with a population of at least one million (1,000,000) or in (2)hospitals and clinics with a bed capacity of at least one hundred (100), their normal hours of work are eight (8) hours a day, for five (5) days a week, exclusive of time for meals. (Article 83, LCP)
Health personnel includes resident physicians, nurses, nutritionists, dietitians, pharmacists, social workers, laboratory technicians, paramedical technicians, psychologists, midwives, attendants and all other hospital or clinic personnel.
Overtime work by health personnel included in the two abovementioned instances is, as a rule, not allowed since it involves strenuous physical work considering the number of patients or clients they must attend to. However, they may be compelled to work beyond such hours where the exigencies of the service require that they work for six (6) days or forty-eight (48) hours. But the employer is required to pay an additional compensation of at least thirty percent (30%) of their regular wage for work on the sixth day.
Can an employee be compelled to render overtime?
Generally, employers cannot compel the employee to render overtime, except in certain instances (Sec 10, Rule I, Bk. III, IRR) to wit:
1) When the country is at war or when any other national or local emergency has been declared by the National Assembly or the Chief Executive;
2) When overtime work is necessary to prevent loss of life or property, or in case of imminent danger to public safety due to actual or impending emergency in the locality caused by serious accident, fire, floods, typhoons, earthquake, epidemic or other disaster or calamities;
3) When there is urgent work to be performed on machineries, installations, or equipment, in order to avoid serious loss or damage to the employer or some other causes of similar nature;
4) When the work is necessary to prevent loss or damage to perishable goods;
5) When the completion or continuation of work started before the 8th hour is necessary to prevent serious obstruction or prejudice to the business or operations of the employer;
6) When overtime work is necessary to avail of favorable weather or environmental conditions where performance or quality of work is dependent thereon.
Can an employee insist to work overtime?
The employee cannot compel his employer to allow him to work overtime when the circumstances does not require him to do so as when there is actually no work to be performed.
Under time cannot be offset by overtime
Under time work on any particular day shall not be offset by overtime work on any other day (Article 88, LCP). The reason behind this is fairness. If the employee works for less than eight hours, he will be paid only for the corresponding number of hours he had actually worked. If on another day he works beyond the maximum hours, he should be given additional compensation.
Non-payment of overtime pay is not only illegal but also contrary to public policy. The employer cannot use the overtime to offset the under time because payment of overtime pay is mandatory. However, he may either deduct the under time from the wage of the employee, or through other approaches. Although these methods are not provided by law, these may be found in company policies or established by company practices.
Computation of wages
The Department of Labor and Employment (DOLE) has set out the following rules in computing overtime pay, pay for work done on holidays, premium on nightshift and 13th month pay:
Computing Overtime:
On Ordinary Days
Plus 25% of the hourly rate multiplied by the number of hours.
On a rest day, special day or regular holiday
Plus 30% of the hourly rate on said days multiplied by the number of hours.
Computing pay for work done on:
A special day (130% x basic pay)
A special day, which is also a scheduled rest day (150% x basic pay)
A regular holiday (200% x basic pay)
A regular holiday, which is also a scheduled rest day (260% x basic pay)
Computing Night Shift Premium Where Night Shift is a Regular Work:
On Ordinary day (110% x basic hourly rate)
On a rest day, special day, regular holiday (110% of regular hourly rate for a rest day, special day, regular holiday)
Computing Overtime on Night Shift:
On ordinary day (110% x overtime hourly rate)
On rest day, special day or regular holiday (110% x overtime hourly rate for rest days, special days, regular holidays)
Computing 13th Month Pay:
Total basic salary earned for the year exclusive of allowances, overtime, holiday, and night shift differential pay divided by 12 months = 13th month pay.
Sample computation of Overtime Pay per Hour
Let us assume a regular daily wage rate of Php 404.00, what is the overtime rate per hour?
On Ordinary days:
First, let’s compute for the hourly wage rate as follows:
Regular hourly rate = Daily wage rate / 8 hours
= P404/8
= P50.5 per hour
Then, let’s compute for the overtime rate per hour as follows:
Overtime rate = hourly rate + 25% of hourly rate
= P50.5 + (.25 x 50.5)
=P50.5 + 12.65
=P63.125 per hour
On a rest day and special day
Computation of hourly wage rate:
Hourly rate = 130% of Regular Hourly Rate
= P50.5 x 1.3
= P65.65 per hour
Computation of overtime rate:
Overtime rate = Hourly rate + 30% of Hourly rate
= P65.65 + (30% of P65.65)
= P65.65 + P19.695
= P85.345 per hour
On a rest day which falls on a special day
Computation of hourly wage rate:
Hourly rate = 150% of Regular hourly rate
=P50.5 x 1.5
=P75.75 per hour
Computation of overtime rate:
Overtime rate = Hourly rate + 30% of Hourly rate
= P75.75 + (30% of P75.75)
= P75.75 + 22.725
= P98.475
On a regular holiday
Computation of hourly wage rate:
Hourly rate = 200% of Regular hourly rate
=P50.5 x 2
=P101 per hour
Computation of overtime rate:
Overtime rate = Hourly rate + 30% of Hourly rate
=P 101 + (30% of P101)
=P101 + 30.3
=P131.3 per hour
On a rest day which falls on regular holiday
Computation of hourly wage rate:
Hourly rate = 260% of Regular hourly rate
=P50.5 x 2.6
=P131.3 per hour
Computation of overtime rate:
Overtime rate = Hourly rate + 30% of Hourly rate
=P 131.3 + (30% of P131.3)
=P131.3 + 39.39
=P170.69 per hour
Source: Department of Labor and Employment (DOLE) Philippines
Disclaimer: New and subsequent issuances, rulings, or laws may cause the whole or part of the article inaccurate or obsolete. It is advised to make inquiries with the Department of Labor and Employment for more information.
Victorino Q. Abrugar is a marketing strategist and business consultant from Tacloban City, Philippines. Vic has been in the online marketing industry for more than 7 years, practicing problogging, web development, content marketing, SEO, social media marketing, and consulting.
Overtime rate = hourly rate + 25% of hourly rate
= P50.5 + (.25 x 50.5)
=P50.5 + 12.65
=P63.125 per hour
.25×50.5 = 12.63 not 12.65
anyway the amount was not changed if you round off 63.125 (63.13). The result is just the same. however still need to alter the amount to avoid confusion to readers. nice page anyway 🙂
correct ka jan te.
hi, i find your site very useful. anyways, i want to know about night differential thought it’s been discussed above, how much do we pay if the security guards, employed in our condominium, earn Php 350.00 per day/per security guard for 8 hours shift from 11:00pm to 7am the next day? and how much is the pay if that night shift is considered as overtime? We’ll appreciate your help. please show example.thank you very much.
Sir, I just have a question about the Night Diff computation. Your article says:
“Computing Night Shift Premium Where Night Shift is a Regular Work:
On Ordinary day (110% x basic hourly rate)
On a rest day, special day, regular holiday (110% of regular hourly rate for a rest day, special day, regular holiday)”
Isn’t the rate only 10%? Because if ND rate is 110% of the hourly rate, then it’s bigger than the actual hourly rate itself. I’m filing for salary disputes now and I find your tips really helpful. I’m just confused about the Night Diff. Thank you.
the computation above above is correct.
night differential is 10% higher than the actual rate i think start 10pm onwards.
481/8 = 60.125 rate / hr
if it’s night differential hourly rate should be:
481/8 = 60.13 x 110% = 66.1375
hi sir,
pls help me compute overtime pay & night differential if he earn 70 hours for 15 days.
schedule of work is from 8-12 1-5pm. daily rate is 482 + 26.51 ecola.
Hi Sir,
I’m currently working on the overtime budget of our company. Please help me to compute the overtime budget per employee. Is there a percentage application?
Thank you and looking forward for your immediate response.
Hi Sir,
Im currently working as Part time employee, meaning im only rendering 4hrs per day on a BPO company, is there any law on overtime pay for a partime? is overtime still applicable to partime if i render more than 4hrs?
thanks
hi.
would like to seek advise for this situation:
employee comes in at 08:18 and regular working day ends at 17:00 but is claiming overtime for 17:00 to 20:00? what time should the employee start his overtime? is there a fixed guideline regarding these?
Monthly Salary : P17,000
Daily Rate : 17,000 x 12/365 = 558.90
Hourly Rate : 558.90/8 = 69.86
Working Hour : 9am – 5pm (Mon-Sat)
Let’s say there’s ONE day of the month where the staff working hour changed to 4pm-12am instead of the regular 9am-5pm.
In that case, we need to pay him a night differential from 10pm-12am.
Assuming there is holiday pay, no other deduction (statutory deduction, tax, unpaid leave, etc).
How much salary should I pay to the staff at the end of the month?
Night differential : Daily rate x Additional 10% for the night differential x number of hours
: 69.86 x 0.1 x 2
: 13.97
Since there is no other deduction, the final pay to the staff should be
17000 (basic) + 13.97 (2hrs night differential)
= P17,013.97
Correct me if I am wrong.
Thanks.
Good day Sir!
Sa nature ng business ng company na pinapasukan ko, may mga nagna-night shift.
if in case Saturday is a regular day, and Sunday is their Restday.
Nag-work from 6pm to 6am ng Saturday, may 3 hours siyang overtime.
What will be the overtime rate to use: 137.5% or 143%?
Naguguluhan po kc ako sa computation ng overtime. Ex po. Regular employee naman ako na kahit na holiday e may bayad. Paano po ba talaga cocomputin ang overtime halimbawa po ng Chinese New Year. Yung 100% ko po ba na na kasama na dun sa monthly ko e 30% lang ang idadagdag as OT pay ko or +130% po? Kc po kung 30% lang, e di wag na lang po sanang pumasok dahil kulang pa sa pamasahe ko. So mag stay na lang ako sa bahay para makagawa na lang ako ng trabahong bahay. Maraming salamat po.
if it is announced or declared as Regular Holiday at pumasok ka dapat bayad ka ng double,
holiday with work should pay as double and if you render overtime your wages would add 30%
see this example.
400 basic pay
400/8hours
50 pesos/ hour
50×260% or 50×2.6=130 per hour
ex. you render 3 hours O.T
130x.30=39
130+39=169x3hours = 507
then your B.pay 1040+OT 507=
total 1547 over all pay
there’s some correction from your computation
ex
basic pay 400
per hour basis 50
if holiday 200%
260% if there is Overtime
comp. over time
50×30%or 50x.30=15
50+15=65
Ex.OT 3hours
65×3=195
in simple way
B.P.=400+195, OT
595 then double it
Hi Good Day!
What if the basic salary would be 10k/month regardless of the working days of the month?
Ex. Feb 2018 = 20 working days | April 2018 is 22 working days
How will we compute the base pay?
My monthly salary is P30000. I work from Mondays to Fridays. Saturdays and Sundays are my days off.
1) I worked for 10 hours on April 12, Sunday, my rest day. how much will be my salary that day.
Please help. Thank you.
i need to know the formula of 12hrs duty fall in legal holiday and special holiday. can u give the formula
Hi our understanding to night differential pay is additional 10% to the basic pay. Currently our formula using if hourly rate + fixed 10% (regardless if this is Restday, Special holiday, etc.)
Good day po…
ask ko lang po na kapag regular holiday po ba at pumasok ka let say 4 hours lng, hindi po ba ito mababayaran as double pay? or kelangan mag exceed ka ng 8 hrs para mabayaran. di po ako sure kung ang ginagawang computation dito sa office namin eh kapag nag exceed ka lng ng 8 hours dun palang mababayaran un 8 hrs mo ng double plus un OT.
pahelp naman po para maipacorrect ko un computation nila kc sayang naman po ung duty namin kung di kami nababayaran ng tama.
pag pumasok ako ng weekends considered OT na ba agad yung first 8 hours? or 130% lang?
No, OT is work beyond 8 hours. So if you work on a rest day you’d get 100% of your salary per day. Working on OT, it’d be salary per hour x 1.95 (195%). To get the total, add the amount of fixed salary that day (8hours) and the OT pay.
as a BPO agent there are instances we logged out on our stations.
we are being paid by the clock time, the time we logged in and out of our station, not from the time we start our shift and ended our shift.
the article 88 of labor code is what i am confused about.
for example:
for example: due to some logged out time on this day, i only clocked 7.25 hours as my work hours. but i rendered full 1 hour OT after my shift time. will this 0.75 missing hour be deducted from my OT hour to offset the missing hour or i shall i be paid in full for my OT.
will the computation be?
(7.25 x hourly rate) + (1 x OT rate)
or
(8.0 x hourly rate) + (0.75 x OT rate)
thanks in advance
Rest day ko ay kada sunday..den pinapasom kmi ng sunday at 10hrs inabot nun..panu po ba computation ng sumobra sa 8hrs n restday(sunday) o.t??1.30% s first 8hrs den 1.30%x1.30% s sumobrang 2hrs po ba??
i believe it is considered rest day overtime lahat ng 10hours.
10hrs x 130% of your basic hourly rate
Hi there,
Just want to ask if what my company is doing legal because they are rounding down every time for OT, not just final OT computation.
For example:
5 hours and 55 minutes = 5.75
1 hour and 25 minutes = 1.25
(NOTE: 0.25 for every 15 minutes, so 45 minutes is 0.75)
Total: 7 hours and 20 minutes = 7.25
But in their computation it will only be 7.00.
Is this normal?
Thanks.
Ask kolang po, pag nag work ka po ba sa trucking , wala bang overtime yon? Yun po kasi sabi ng boss namin..paki help naman po..
hi what if I render 15-20 mins. of work beyond 8hours work period, is that paid?
Hi! I’m just curious, did they answer your question? Can you share it with me..because I’m always rendering 15-20 minutes beyond 8hrs. so I can know if I’m going to file an overtime or not. Thanks po.
hi po good afternoon im rommel im working in sound system name RSL may reklamo lang po aku about sa sahod namin kase tagal na po ng taas ng sahod pero samin hanggang ngayon po 481 pa rin po ang basic at wala po kami night differential at ang working hours po namin is 12 hours bago po kami magkaroon ng tinatawag na overtime please act this one naman po salamat po and godbless po ..
hi, ask ko lang , san ko makikita yung provision sa labor code regarding sunday as overtime .
Kung sa 7 days work from Monday to Sunday umabsent siya ng saturday, yung computation ba ng Sunday is overtime or Regular day? what i mean, dapat bang makumpleto niya muna ang 7 days na pasok and yung ika 7 days niya ang o.t
Hi,
Ask ko po. Yung employer kasi namin 30% lang ng hourly rate namin ang binayaran instead of 130%.
Ex. Hourly rate is 50.00 only 15.00 lang overtime pay and until now wala pa din silang reply sa complain namin.
What can we do?
Is e-COLA and COLA included in the OT pay?
Hi po, marami po akong natutunan dito, salamat po. Isang bagay lng po, halimbawa nagstraight duty ako ng 24 hrs. Pano po icompute yon? Kahit formula lng po sana. Umaasa po sa reply nyo.
If I worked from 8 AM- 5 PM and rendered overtime fro 5 PM- 11 PM, am I entitled for 1 hour night differential?
what if you start to work 8am and you finish 8 am also,
that is only overtime? there’s no night differential?
Hi Ella,
Please find the answer in our forum
https://businesstips.ph/forum/business-tax-accounting-government-requirements/how-to-compute-night-differential/
We will disable comments on the posts and don’t answer the questions here. If you have a question, please post it to our forum. Thank you.