How to compute overtime pay in the Philippines

Overtime pay is 125% of the hourly rate on ordinary days and 30% more on rest days and holidays. How to get the hourly rate, with worked examples.

Updated · 6 min read · Figures computed with the Payslip.ph payroll engine on the 2026 rules

Overtime in the Philippines is any work beyond eight hours in a day. The employer must pay at least 25% more for each overtime hour on an ordinary day, and 30% more on rest days and holidays. The only real work is getting the hourly rate right.

In short
  • Ordinary day: 125% of the hourly rate per overtime hour.
  • Rest day, special day or holiday: that day's hourly rate plus 30%.
  • Hourly rate = daily rate ÷ 8. For monthly-paid staff, convert to a daily rate first.

Step 1: find the daily rate

For daily-paid workers the daily rate is the rate they are hired at. For monthly-paid staff, divide the yearly salary by the number of days a year the salary pays for:

Daily rate = monthly salary × 12 ÷ factor
FactorUsed whenDaily rate on ₱20,000.00 a month
365Paid for every day of the year, including rest days and holidays₱657.53
313Six-day work week; the 52 rest days are unpaid₱766.77
261Five-day work week; Saturdays and Sundays are unpaid₱919.54
Pick one factor and stick to it
The factor also decides absence deductions and holiday pay. Using 365 for overtime but 261 for absences shortchanges either the worker or you.

Step 2: apply the overtime rate

Overtime pay = (daily rate ÷ 8) × overtime rate × overtime hours
Overtime onRatePer hour at ₱755.00 a day
Ordinary day125%₱117.97
Rest day or special day169%₱159.49
Special day on a rest day195%₱184.03
Regular holiday260%₱245.38
Regular holiday on a rest day338%₱318.99

Example: monthly-paid, three hours of overtime

An office employee on ₱20,000.00 a month, on a six-day week, stays three hours after an ordinary working day.

Three overtime hours on an ordinary day
Daily rate: 20,000 × 12 ÷ 313
₱766.77
Hourly rate: daily ÷ 8
₱95.85
Overtime: 3 hours × 125%
₱359.42

Payslip.ph multiplies the daily rate by the minutes and the rate and rounds once, so a rounded hourly rate never compounds into the total.

Rules employers get wrong

  • Undertime is not offset by overtime. Arriving an hour late and staying an hour longer is one hour of undertime and one hour of overtime.
  • Unauthorized overtime is still paid if you knew of the work and allowed it. Require written approval in advance if you want to control it.
  • Overtime is only voluntary up to a point. The law lets you require it in emergencies, such as urgent work on machines or work needed to prevent loss of perishable goods.
  • Meal breaks of at least 60 minutes are not hours worked. Shorter rest breaks of up to 20 minutes are.

For night work add the night differential. For the rates on holidays, see holiday pay computation.

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Common questions

What is the overtime rate in the Philippines?

At least 125% of the hourly rate for each hour beyond eight on an ordinary working day. On a rest day, special day or regular holiday, overtime is that day's hourly rate plus 30%.

How do I compute the hourly rate of a monthly-paid employee?

Convert the monthly salary to a daily rate first: monthly salary × 12 ÷ the number of paid days a year (365, 313 or 261 depending on the arrangement). Then divide the daily rate by 8.

Can undertime be offset by overtime?

No. Undertime on one day cannot be set off against overtime on another day, and permission to go on leave does not excuse paying overtime worked.

Do managers get overtime pay?

Not under the Labor Code. Managerial employees, officers, field personnel and some others are excluded from the hours-of-work rules, though their contract or company policy may grant it.

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