Terminology.

Overtime Pay.
Overtime pay is the additional compensation payable to employee for services or work
rendered beyond the normal eight hours of work. It is computed by multiplying the overtime
rate with the number of hours in excess of the regular eight hours of work.
Overtime Work.
Any work performed beyond the normal 8 hours of work in one workday is considered as
overtime work.
Workday.
A workday is the consecutive 24-hour period which commences from the time the employee
starts to work and ends at the same time the following day. To illustrate, if the employee
regularly works from 8AM to 4PM, hisregular workday is the 24-hour period from 8AM to 8AM
of the following day. Workdays do not necessarily corresponds to calendar days.
Overtime Pay Rates.
Overtime pay rates depend upon the day the work is performed, whether it is ordinary
working day, special day, holiday or rest day.
For ordinary working day, an additional compensation equivalent to his regular hourly rate
plus at least 25% thereof.
For holiday, special day and rest day, an additional compensation equivalent to the rate for
the first eight hours on a holiday or rest day plus at least 30% thereof.
Computation of Overtime Pay
Assuming that the mininum wage rate is P250, how much is the overtime rate per hour?
On ordinary day
On an ordinary day, the overtime rate per hour is determined as follows:
First, compute the hourly rate of the employee:
Regular hourly rate = Minumum wage rate 8 hours
= P250 8 hours
= P31.25 per hour
Now to determine overtime rate per hour:
Overtime rate = Regular hourly rate + 25% of Regular hourly rate
Overtime rate = P31.25 + (25% of P31.25)
= P31.25 x 1.25
= P39.06 per hour
On rest day and special day
Compute the hour rate of the employee on a rest day or special day:
Hourly rate = 130% of Regular hourly rate
= P31.25 x 1.30
= P40.625 per hour
(Note: The hourly rate on rest day and special day is 130% of the regular rate.)
To determine overtime rate per hour:
Overtime rate = Hourly rate on rest day + 30% Hourly rate on rest day
= P40.625 + (30% of P40.625)
= P40.625 x 1.30
= P52.81 per hour
On rest day which falls on a special day
Compute the hourly rate of the employee on a rest day which falls on a special day:
Hourly rate = 150% of Regular hourly rate
= P31.25 x 1.50
= P46.875 per hour
To determine overtime rate per hour:
Overtime rate = Hourly rate + 30% of Hourly rate
= P46.875 + (30% of P46.875)
= P46.875 x 1.30
= P60.94 per hour
On a regular holiday
Compute the hourly rate on regular holiday:
Hourly rate = 200% of Regular hourly rate
= P31.25 x 2
= P62.5 per hour
To determine overtime rate per hour:
Overtime rate = Hourly rate + 30% of Hourly rate
= P62.50 + (30% of P62.50)
= P62.50 x 1.30
= P81.25 per hour
On a rest day which falls on a regular holiday
Compute the hourly rate:
Hourly rate = 260% of Regular hourly rate
= P31.25 x 2.60
= P81.25 per hour
To determine overtime rate per hour:
Overtime rate = Hourly rate + 30% of Hourly rate
= P81.25 + (30% of P81.25)
= P81.25 x 1.30
= P105.625 per hour
Work need not be Continuous.
Work performed by the employee need not be continuous as long as it falls within the same
work day. For example, an employee who works in two shifts, one from 8AM to 12AM (four
hours), and another from 4PM to 8PM of the same work day (another four hours), suffers a
total of 8 hours of work. If he is required to work for another hour within the same work day
(from 8AM to 8AM of the following day), then such work is subject to overtime pay.
Undertime cannot be Offset by Overtime.
Some employers has the practice of offsetting undertime and overtime. For example, if an
employee work for only 7 hours on any given day (one hour undertime), he will be required
to make up for his undertime by requiring him to render additional one hour work on another
day. This practice is prohibited under Article 87 of the Labor Code, viz:

Ordinary day Night Shift

Let say the employee hourly rate is Php 57.00/hour and working from 10pm to 6am

To determine the employee Night Differential pay:

Ordinary Day Night Differential = (Hourly rate X 10% % X 8 hours)

Php 45.60 = (Php 57.00 X 0.10 % X 8 hours)

Rest day Night Shift

Let say the employee hourly rate is Php 57.00/hour and working from 10pm to 6am

To determine the employee Night Differential pay:

Rest Day Night Differential = (Hourly rate X 130 % X 10% X 8 hours)

Php 59.28 = (Php 57.00 X 1.3 % X0.10% X 8 hours)

Special Holiday Night Shift

Let say the employee hourly rate is Php 57.00/hour and working from 10pm to 6am

To determine the employee Night Differential pay:

Special Holiday Night Differential = (Hourly rate X 130 % X 10% X 8 hours)

Php 59.28 = (Php 57.00 X 1.3 % X0.10% X 8 hours)

Special Holiday and at the same time Rest day Night Shift

Let say the employee hourly rate is Php 57.00/hour and working from 10pm to 6am

To determine the employee Night Differential pay:

Special Holiday Rest day Night Differential = (Hourly rate X 150 % X 10% X 8 hours)

Php 68.40 = (Php 57.00 X 1.5 % X0.10% X 8 hours)

Regular Holiday Night Shift

Let say the employee hourly rate is Php 57.00/hour and working from 10pm to 6am

To determine the employee Night Differential pay:

Regular Holiday Night Differential = (Hourly rate X 200 % X 10% X 8 hours)

Php 91.20 = (Php 57.00 X 2.0 % X0.10% X 8 hours)

Regular Holiday and at the same time Rest day Night Shift

Let say the employee hourly rate is Php 57.00/hour and working from 10pm to 6am

To determine the employee Night Differential pay:

Regular Holiday Rest day Night Differential = (Hourly rate X 260 % X 10% X 8 hours)

Php 118.56 = (Php 57.00 X 2.6 % X0.10% X 8 hours)

Double Holiday Night Shift

Let say the employee hourly rate is Php 57.00/hour and working from 10pm to 6am

To determine the employee Night Differential pay:

Double Holiday Night Differential = (Hourly rate X 330 % X 10% X 8 hours)

Php 150.48 = (Php 57.00 X 3.3 % X0.10% X 8 hours)

Double Holiday and at the same time Rest day Night Shift

Let say the employee hourly rate is Php 57.00/hour and working from 10pm to 6am

To determine the employee Night Differential pay:

Double Holiday Rest day Night Differential = (Hourly rate X 390 % X 10% X 8 hours)

Php 177.84 = (Php 57.00 X 3.9 % X0.10% X 8 hours)

PAYROLL