You are an employer staring at a payroll spreadsheet, sweating bullets.
Or maybe you are an employee wondering if your overtime check is short.
Either way, figuring out overtime pay in the Philippines can feel like a maze.
The Labor Code throws around terms like “25% premium” and “regular holiday rates.”
Confusing? Heck yeah.
But don’t worry—I’m breaking it down.
This guide cuts through the noise, gives you the exact steps, and throws in real-world examples.
Let’s make sure everyone gets paid right.
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Get it sorted, and let’s look at overtime pay in the Philippines.
What is Overtime Pay in the Philippines?
Overtime pay is extra cash for work beyond the standard 8-hour day or 48-hour week.
The Labor Code of the Philippines (Presidential Decree No. 442) sets the rules.
It is not optional—employers must pay it, and employees deserve it.
Think of it as a thank-you for burning the midnight oil.
But the rates change based on the day—regular, rest, or holiday.
Miss a step, and you are either overpaying or risking a DOLE (Department of Labor and Employment) complaint.
Who is Eligible for Overtime Pay?
Not everyone gets overtime pay.
Here’s the deal:
- Rank-and-file employees: You are covered. If you work past 8 hours, you get extra.
- Exempt folks: Managers, field personnel, piece-rate workers, and kasambahays (household workers) usually don’t qualify.
- Government employees: Sorry, you’re out of luck unless your agency has special rules.
Check your contract or Collective Bargaining Agreement (CBA). Some companies pay more than the minimum—lucky you if that’s the case.
How to Calculate Overtime Pay: Step-by-Step
Let’s get to the meat.
Computing overtime pay isn’t rocket science, but it is got layers.
Follow these steps, and you will nail it every time.
Step 1: Find the Regular Hourly Rate
Your daily wage divided by 8 hours.
No Cost of Living Allowance (COLA) or bonuses in this calc.
Example: Sofia, an admin assistant, earns ₱800/day.
Her hourly rate? ₱800 ÷ 8 = ₱100/hour.
Simple math, right?
Step 2: Know Your Overtime Multiplier
The multiplier depends on the day. Here is the breakdown:
- Regular workday: 125% of your hourly rate (1.25x).
- Rest day or special non-working holiday: 130% of your hourly rate (1.3x).
- Regular holiday: 200% of your hourly rate for the first 8 hours, plus 130% for overtime hours (2x, then 1.3x).
- Night shift (10 PM–6 AM): Add a 10% night shift differential on top of the overtime rate.
Step 3: Multiply Overtime Hours by the Rate
Take your hourly rate, apply the multiplier, then multiply by overtime hours.
Formula: Overtime Pay = Hourly Rate × Multiplier × Overtime Hours.
Let’s run some examples to make it crystal clear.
Overtime Pay Examples in the Philippines
To make this even better, I will give a few examples to help you grasp the idea.
Scenario 1: Overtime on a Regular Workday
Sofia works 10 hours on a Tuesday.
Her regular hourly rate is ₱100.
Overtime rate = ₱100 × 1.25 = ₱125/hour.
She worked 2 overtime hours.
Overtime pay = ₱125 × 2 = ₱250.
Total for the day: ₱800 (regular pay) + ₱250 (overtime) = ₱1050.
Scenario 2: Overtime on a Rest Day
Sofia’s scheduled rest day is Sunday, but she works 12 hours.
Her daily wage (₱800) gets a 30% boost: ₱800 × 1.3 = ₱1040.
Hourly rate for the day: ₱1040 ÷ 8 = ₱130.
Overtime rate = ₱130 × 1.3 = ₱169/hour.
She worked 4 overtime hours.
Overtime pay = ₱169 × 4 = ₱676.
Total for the day: ₱1040 + ₱676 = ₱1716.
Scenario 3: Overtime on a Regular Holiday
Sofia works insensitive hours on Christmas (a regular holiday).
Her daily wage doubles: ₱800 × 2 = ₱1600 for 8 hours.
Hourly rate: ₱1600 ÷ 8 = ₱200.
Overtime rate = ₱200 × 1.3 = ₱260/hour.
She worked 2 overtime hours.
Overtime pay = ₱260 × 2 = ₱520.
Total for the day: ₱1600 + ₱520 = ₱2120.
Scenario 4: Night Shift Overtime
Sofia pulls a 10-hour night shift (10 PM–6 AM) on a regular day.
Regular hourly rate: ₱100.
Night shift differential: ₱100 × 1.1 = ₱110/hour.
Overtime rate (with night differential): ₱110 × 1.25 = ₱137.5/hour.
She worked 2 overtime hours.
Overtime pay = ₱137.5 × 2 = ₱275.
Total for the day: ₱800 (regular) + ₱275 (overtime) = ₱1075.
Common Mistakes to Avoid
Screw-ups happen. Here is how to dodge them:
- Using the wrong multiplier: Double-check if it’s a holiday, rest day, or regular day.
- Including COLA or bonuses: Only use the basic wage.
- Offsetting undertime: Undertime on Monday doesn’t cancel overtime on Tuesday. The Labor Code (Article 88) says no.
- Forgetting night shift differential: Night shift workers get that extra 10%.
- Sloppy records: Track every hour. DOLE audits don’t mess around.
Pro Tips for Employers
You are running a business.
You can’t afford payroll mistakes.
Here’s how to stay sharp:
- Automate payroll: Tools like SprintHR or Sprout Solutions do the math for you.
- Keep detailed records: Log start times, breaks, and overtime hours.
- Communicate clearly: Tell employees how their pay is calculated. Transparency builds trust.
- Check DOLE updates: Labor laws change. Stay on top of them.
- Limit overtime: Max is 4–8 extra hours daily, depending on the industry. Don’t burn out your team.
Employee Rights: Know Your Worth
Employees, listen up.
You are entitled to overtime pay if you work past 8 hours.
Don’t let employers shortchange you.
- Check your payslip: Verify hours and rates.
- Talk to HR: Ask for a breakdown if something’s off.
- File a DOLE complaint: If you’re not paid right, report it.
- Know your limits: You can refuse overtime if it’s not an emergency (e.g., war, natural disaster, or urgent equipment fixes).
Your work, your time, your money. Protect it.
Read also: How to Dropship in the Philippines (Steps + Strategies for Profits)
Why Accurate Overtime Pay Matters
Messing up overtime pay isn’t just a math error.
It is a trust killer.
Employees feel cheated, and employers risk DOLE penalties.
A 2021 ADP Research Institute study said unpaid overtime in the Philippines jumped from 7.3 to 9.2 hours per week.
That’s real money left on the table.
Get it right, and you keep everyone happy.
Tie It Back to Your Business with Truehost.ph
Payroll is just one piece of the puzzle.
Your business needs a strong online presence to stand out.
A .ph domain from Truehost.ph (starting at ₱2000/year) lets you build a site that screams professionalism.
Post your overtime policies, attract talent, or even sell payroll services.
Head to Truehost.ph and lock in your domain.
It is cheap, it is local, it is a no-brainer.
Final Thoughts
Overtime pay doesn’t have to be a headache.
Know the rules, do the math, and keep records tight.
Employers, pay what you owe—DOLE’s watching.
Employees, know your rights and check your payslips.
Got questions? Drop them below, and I’ll break it down like we’re grabbing coffee.
Now go get that payroll sorted.
Read also:
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- How to Be an Actress in the Philippines (Works 100%)
- How to Start a Business with Small Capital in the Philippines