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.
- 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:
| Factor | Used when | Daily rate on ₱20,000.00 a month |
|---|---|---|
| 365 | Paid for every day of the year, including rest days and holidays | ₱657.53 |
| 313 | Six-day work week; the 52 rest days are unpaid | ₱766.77 |
| 261 | Five-day work week; Saturdays and Sundays are unpaid | ₱919.54 |
Step 2: apply the overtime rate
| Overtime on | Rate | Per hour at ₱755.00 a day |
|---|---|---|
| Ordinary day | 125% | ₱117.97 |
| Rest day or special day | 169% | ₱159.49 |
| Special day on a rest day | 195% | ₱184.03 |
| Regular holiday | 260% | ₱245.38 |
| Regular holiday on a rest day | 338% | ₱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.
- 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.