Working hours in the Philippines cannot exceed eight hours in a day, not including the mandatory one-hour lunch break. Art. A child below 15 years cannot work for more than 4 hours a day, while adolescents (15 and 18 years) cannot work for more than 8 hours a day. Rest periods of short duration during working hours are regarded as hours worked. “This is pursuant to our existing policy to recognize voluntary work arrangements between companies and their employees that is mutually beneficial and does not diminish existing standards and benefits such as overtime pay premium and night shift differential,” Labor Secretary Silvestre H. Bello III said. No. COLA is not included in overtime calculation. Retail and services 4. The Trade Union Congress of the Philippines (TUCP) has thrown its support behind two House bills seeking to exclude from income taxes all overtime and graveyard shift differential pay received by salaried employees, including the country’s 1.1 million business process outsourcing (BPO) workers who perform jobs all day and all night. Article 86 of Philippine Labor Code states, “Every employee shall be paid a night shift differential of not less than ten percent (10%) of his regular wage for each hour of work performed between ten o’clock in the evening and six o’clock in the morning.” Source: §82, 83, 84, 87, 88 and 89 of the Labour Code, as amended; §12A of the Special Protection of Children against Child Abuse, Exploitation and Discrimination Act; Department Advisory No. 110% x number of hours in excess of 8 hours (130% x hourly rate) Monthly rate: Php10,000 Daily rate (20 working days/month): 10,000/20= Php500 Hourly rate (8 hours): 500/8= Php 62.50 Article 86 - Night shift differential; Article 87 - Overtime work; Article 88 - Undertime not offset by overtime; Article 89 - Emergency overtime work; Article 90 - Computation of additional compensation; Article 91 - Right to weekly rest period; Article 92 - When employer may require work on a rest day; Basic Labor Code of the Philippines - Night Shift Differential (NSD) Night Shift Differential For work performed from 10:00 p.m. to 6:00 a.m. the following day, the employee is entitled to a night shift differential pay of not less than 10% of his regular wage for each hour of work rendered. Source: Article 86, Labor Code of the Philippines Knowing the level of compensation your employees should receive if they work the extra hours on regular workdays and, helps you establish a reputable image for your business. Most businesses will outline how shift differentials work, if they’re offered, in the employee handbook.Usually, however, differential Is it a rest day, a regular holiday, or a special non-working day? 442 of 1974), Special Protection of Children against Child Abuse, Exploitation and Discrimination Act, Department Advisory No. However, kasambahay under the age of 18 years are not allowed to work more than 8 hours a day, 5 days a week, exclusive of 1 hour breaks for each regular meal of the day. *same monthly rate applied in the computation, Regular holiday (200% x basic pay)10,000 x 2 = Php 20,000Holiday pay (i.e., 20 working days/month): 1.1 x (20,000/20) = Php 1,100/day, Regular holiday that coincided on a scheduled rest day (260% x basic pay)10,000 x 2.6 = Php 26,000Premium pay (i.e., 20 working days/a month): 1.1 x (26,000/20) = Php 1,430/day, How a PEZA-Accreditation Can Benefit Your Business, 15-Minute Team Building Activities You Can Apply in the Workplace, The Pros and Cons of Working in a Call Center in Manila, Overtime Pay Computations And Policies In The Philippines, , you must know the policies regarding overtime pay computation, or, . ..- - When the schedule of working hours fall; partly within 6:00 PM to 6:00 AM, the night-shift differential pay shall be paid only for the hours within 6:00 PM to 6:00 AM of the following day.- What is the overtime pay computation for employees working on a night shift during a rest day? Can employers/business owners require their employees to render overtime work?The law does not encourage employers/business owners to ask their employees to do overtime work. On an ordinary day, the overtime rate per hour is determined as follows: Every employee shall be paid a night shift differential of not less than ten percent (10%) of his regular wage for each hour of work performed between ten o’clock in the evening and six o’clock in the morning. These rates are set by the Wage Rationalization Act, Republic Act No. Overtime work. However, suppose the employee also earns a shift differential for working weekends or the night shift, or a performance bonus, or a commission. So if he or she worked for less than 8 hours, the compensation will be adjusted accordingly. An employee shall be paid night shift differential of no less than ten percent (10%) of his regular wage for each hour of … Overtime work. Regional Office No. Every employee shall be paid a night shift differential of not less than ten percent (10%) of his regular wage for each hour of work performed between ten o'çlock in the evening and six o'clock in the morning. 86. The normal hours of work of any employee cannot exceed eight (8) hours a day. OVERTIME PAY • An employee is entitled to overtime pay for each hour of work done beyond normal working hours • The overtime rate on normal day is 25% • The overtime rate on rest day and holiday is 30%. This website does not show any ads or advertising materials for an ad-free reading experience of the readers. Ensuring your workspaces are ready for your return and the new norm. Employees who work between 10:00 PM and 6:00 AM are entitled to night shift differential. Take note that it can fall into more than one category: it can be both a rest day and a regular holiday, for example. Overtime work. What is the overtime pay computation for employees working on a night shift during a rest day? Every employee shall be paid a night shift differential of not less than ten percent (10%) of his regular wage for each hour of work performed between ten o’clock in the evening and six o’clock in the morning. If your employee works beyond eight hours, you must pay overtime wages. If you are running a business in the Philippines, you must know the policies regarding overtime pay computation, or shift differentials. Art. For example, the employee is paid $10.00 per hour plus a $2.00 per hour shift differential for the night shift. For example, the employee is paid $10.00 per hour plus a $2.00 per hour shift differential for the night shift. Night shift differential is from 10pm to 6am the following day. Weekends–Saturday and Sunday–are usually allotted as rest days. N ight Shift Differential (NSD) refers to the additional compensation of ten percent (10%) of an employee’s regular wage for each hour of work performed between 10 p.m. and 6 a.m. Generally, all employees are entitled to night shift differentials, except the following: Mywage.org/Philippines is connected to the WageIndicator Network. *same monthly rate applied in the computationRegular holiday: (200% x basic pay)18,000 x 2 = Php36,000Holiday pay (i.e., 20 working days/month): 36,000/20 = Php1,800/day, Regular holiday that coincided on a scheduled rest day: (260% x basic pay)18,000 x 2.6 = Php46,800Premium pay (i.e., 20 working days/month): 46,800/20= Php 2,340/day. As far as the rate of night work is concerned, night shift employees must be paid a differential of at least 10% of the regular wage for each hour of work performed between 10:00 p.m. and 6:00 a.m. If the employee is late for 1 minute, the deduction must not be based more than 1 minute. Category My PayrollHero Account, Payroll, Philippine Payroll Regulations and Information Every employee is entitled to a Night Differential or Night shift pay of not less than 10% of his regular wage for each hour of work performed between 10pm and 6am. Overtime pay rates depend upon the the day the work is performed, whether it is ordinary working day, special day, regular holiday or rest day. Overtime is beyond 8 hours in a single workday, except in flexible work arrangements such as compressed work week. Employee would be paid the overtime rate for the excess hours worked. *same monthly rate applied in the computation, special day: 110% x (130% x basic pay)10,000 x 1.3 = Php 13,000Special day premium pay, night shift: (i.e., 20 working days/month): 1.1 x (13,000/20)= Php 715/day, Special day that coincided on a scheduled rest day: 110% x (150% x basic pay)10,000 x 1.5 = Php 15,000Special and rest day premium pay (i.e., 20 working days/a month): 1.1 x (15,000/20)= Php 825/day, What is the overtime pay computation for employees working on a night shift during a regular holiday? – Every employee shall be paid a night shift differential of not less than ten percent (10%) of his regular wage for each hour of work performed between ten oclock in the evening and six oclock in the morning. Overtime pay, on the other hand, is additional pay for work performed beyond 8 hours in a day. In the Philippines, the minimum wage rates differ for every region, province, and industry. ARTICLE 87. An employee is entitled to night pay for any nonovertime work performed between 6 p.m. and 6 a.m. during designated core hours. Art. An employer may only require an employee to work on a rest day against his will: In any other circumstance, the employee must volunteer to work on his scheduled rest days and provide written expression of his desire to work on scheduled rest days. Cottage and handicraft For example, on average, the minimum daily payroll in the Phili… The amount of 13 th month pay shall at least be 1/12 of the total basic salary earned for the year which shall n include all earnings paid by his/her employer for services rendered but does not include allowances and other monetary benefits such as the cash equivalent of unused vacation and sick leave credits, overtime, premium, night shift differential, holiday pay and COLA. Employees extending their work hours during in the night shift will be given an additional 25% as his overtime rate with their regular hourly rate, plus ten percent 10% for every hour of working between the covered period. An employee is entitled to night pay for those hours that must be worked between 6 p.m. and 6 a.m. to complete an 8-hour daily tour of duty. Calculating for your employees’ overtime, holiday, rest day, and/or night differential premiums is not a walk in the park. When they work the evening shift, they are paid a shift differential of $1 an hour. Overtime work may cause unnecessary stress to workers, making it difficult for them to achieve and maintain work-life balance. What is the computation for overtime pay on a regular work day?Here's a sample computation based on the given values (monthly rate: Php18,000; factor rate: 258; 246 total regular days + 12 regular holidays): Daily rate: 18,000 x 12 / 258= Php837.21Hourly rate (8 hours): 837.21 / 8= Php 104.65, Number of hours in excess of 8 hours (125% x hourly rate x number of hours rendered)Overtime hourly rate: 1.25 x 104.65= Php 130.81/hour, What is the computation for overtime pay on a rest day? In fact, there are 32 different combinations at play. In line with that, you should pay for their rendered service in … A prevailing rate employee is entitled to a night shift differential when the majority of hours worked during a regularly scheduled nonovertime shift occur in either of these two shifts: "Majority of hours" means a number of whole hours greater than one-half (including meal … When they work the night shift they are paid a shift differential of $2 an hour. Can an employee demand overtime work from the employer?The employee cannot urge or oblige the employer to let him or her to render overtime work if it is not required by the circumstance or there is no extra work to be done. To determine the employee Night Differential pay: Special Holiday Night Differential = (Hourly rate × 130% × 10% × 8 hours) Php 59.28 = (Php 57.00 × 1.3 × 0.10 × 8 hours) Special Holiday and at the same time Rest day Night Shift. The undertime can be deducted through his or her wage or through other means. Overtime Work Work may be performed beyond eight hours a day provided that the employee is paid for the overtime work, which consists of an additional compensation equivalent to his regular wage plus at least 25% thereof. *same values used in the computation, First 8 hours = 130%; beyond 8 hours = 169% /hourFirst 8 hours: ((18,000 x 12) / 258) x 1.3 = Php1,088.37Beyond 8 hours: [((18,000 x 12) / 258) x 1.69]/8 = Php176.86/hour, What is the computation for overtime pay on a special day? When the work is necessary to avail of favorable weather or environmental conditions where performance or quality of work is dependent thereon. Overtime pay for work beyond eight hours Night shift differential at 10% increment for work done from 10:00 PM to 6:00 AM Minimum wage earners in the Philippines are not subject to withholding tax and are not required to file income tax returns at the end of the year for obviously, they, will not be any tax due under such exemption. Shift differentials aren’t required by federal law, but many companies, especially in the manufacturing industry, offer them as a way of encouraging employees to take an “undesirable” shift such as the night shift or a weekend shift. If the day factor is 365, rest day is paid even when no work is done. Overtime pay rates are covered under the Labour Code. The Department of Labor and Employment has published advisory guidelines on the adoption of flexible work arrangements which includes compressed workweeks among a range of flexible arrangements which employers may consider implementing in times of economic difficulty or national emergency. *same monthly rate applied in the computation, Special day: (130% x basic pay)18,000 x 1.3 = Php23,400Special day premium pay: (i.e., 20 working days/month): 23,400/20=Php 1,170/day, Special day that coincided with a scheduled rest day: (150% x basic pay)18,000 x 1.5 = Php 27,000Special and rest day premium pay (i.e., 20 working days/month): 27,000/20= Php 1,350/day, What is the computation for overtime pay on a regular holiday? Powered by the WageIndicator Foundation - Share and compare wages, understand Labour Laws and spot career opportunities. 110% x number of hours in excess of 8 hours (130% x hourly rate)Monthly rate: Php10,000Daily rate (20 working days/month): 10,000/20= Php500Hourly rate (8 hours): 500/8= Php 62.50, What is the overtime pay computation for employees working on a night shift during a special day? Women and young persons are prohibited from night work. (When an employee is required to work beyond the normal 8 hours, they are entitled to receive Overtime Pay) If the employee’s overtime reaches overnight or the night differential time frame, the night differential would affect the overtime rate of the employee. Night Shift Differential (NSD) refers to the additional compensation of ten percent (10%) of an employee’s regular wage for each hour of work performed between 10 p.m. and 6 a.m. “Article 82 of the Labor Code states that the provisions of the Labor Code on working conditions and rest periods shall not apply to managerial employees. Night shift differential. The overtime rate is 125% of the normal hourly wage rate if overtime work is performed on an ordinary working day (100 (assumed normal hourly wage)*125%); The overtime rate is 169% of the normal hourly wage rate if the overtime work is performed on a special day or scheduled rest day (100 (assumed normal hourly wage)*130%*130%); The overtime rate is 195% of the normal hourly wage rate if the overtime work is performed on a special day which falls on a scheduled rest day (100 (assumed normal hourly wage)*130%*150%); The overtime rate is 260% of the normal hourly wage rate if the overtime work is performed on a regular holiday (100 (assumed normal hourly wage)*130%*200%); The overtime rate is 338% of the normal hourly wage rate if overtime work is performed on a regular holiday which falls on a scheduled rest day (100 (assumed normal hourly wage)*130%*260%); In case of actual or impending emergencies caused by serious accident, fire, flood, typhoon, earthquake, epidemic or other disaster or calamity to prevent loss of life and property, or imminent danger to public safety;, In cases of urgent work to be performed on the machinery, equipment, or installation, to avoid serious loss which the employer would otherwise suffer;, In the event of abnormal pressure of work due to special circumstances, where the employer cannot ordinarily be expected to resort to other measures;, To prevent loss or damage to perishable goods;, Where the nature of the work requires continuous operations and the stoppage of work may result in irreparable injury or loss to the employer; and. 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