Overtime Pay Calculator

Understanding Overtime Pay Under Philippine Labor Law

Under the Labor Code of the Philippines, the normal hours of work for any employee may not exceed eight hours a day. Any work rendered beyond that eight-hour threshold is considered overtime work, and the law entitles the employee to additional compensation equivalent to their regular hourly rate plus at least 25%of that rate for overtime performed on an ordinary working day. This 25% premium climbs even higher when the overtime is rendered on a rest day or a holiday, because the overtime premium is calculated on top of whatever premium already applies to that type of day, not on top of the plain, unpremium daily rate.

This is one of the most misunderstood parts of Philippine payroll. Many employees — and even some employers — assume overtime pay is a flat 25% add-on regardless of the day. In reality, the Labor Code treats overtime pay as a percentage of the "hourly rate on that day," and the hourly rate on that day already reflects whether it was an ordinary day, a rest day, a special non-working holiday, or a regular holiday. That is why overtime rendered on a regular holiday that also happens to fall on an employee's rest day can command a multiplier well over three times the ordinary hourly rate.

It's also worth clarifying that overtime pay is a statutory right, not a discretionary bonus. As long as the employee is covered by Title I, Book III of the Labor Code (that is, not one of the exempt categories discussed later in this guide), the employer must pay overtime premium for hours actually worked beyond eight, whether or not the extra work was formally authorized in advance. Requiring prior approval before rendering overtime is a legitimate internal control that companies can enforce for disciplinary purposes, but it does not extinguish the employee's right to be paid for overtime hours actually rendered and accepted by the employer.

The Complete Overtime and Premium Pay Multiplier Table

The table below summarizes every combination of rest day, special holiday, and regular holiday work, along with the corresponding basic day-rate multiplier and the overtime hourly-rate multiplier that applies to any hours rendered beyond the regular eight-hour shift on that same day. All multipliers are applied to the employee's hourly rate, which is simply the daily rate divided by eight.

Notice the pattern: the overtime hourly-rate multiplier for any premium day is simply that day's basic multiplier increased by another 30% (multiplier × 1.30). This 30% "overtime-on-overtime" premium is consistent across rest days, special holidays, and regular holidays, which makes it easy to sanity-check your own payslip once you know the day's base multiplier.

Night Shift Differential and How It Stacks With Other Premiums

Night shift differential (NSD) is a separate premium mandated for work performed between 10:00 PM and 6:00 AM. Employees are entitled to an additional 10% of their applicable hourly rate for every hour worked within this window, regardless of whether that hour is part of their regular eight hours or part of their overtime.

The key detail that trips up a lot of payroll computations is that night differential is not calculated on the plain, unpremium hourly rate — it is calculated on the hourly rate that already applies to that particular day. In other words, night differential stacks multiplicatively with rest day and holiday premiums rather than being added as a flat, separate figure. If an employee works the graveyard shift on their rest day, the 10% night differential premium is computed on their rest-day hourly rate (which is already 130% of their ordinary hourly rate), not on the ordinary hourly rate itself.

The formula looks like this: Night Differential Pay = Hourly Rate × Day Multiplier × 10% × Night Differential Hours. So for an employee with an hourly rate of ₱75 who works two hours of night shift on an ordinary rest day, the night differential pay would be ₱75 × 1.30 × 0.10 × 2 = ₱19.50 — noticeably higher than the ₱15.00 you would get if the 10% were applied to the plain hourly rate without the rest day premium. This stacking effect means that night shift employees who also work holidays or rest days receive meaningfully larger night differential amounts than day-shift employees performing the identical number of night hours on an ordinary working day.

It is entirely possible — and common in industries like business process outsourcing, manufacturing, and hospitality — for a single shift to combine all three premiums at once: overtime, a rest day or holiday premium, and night shift differential. When that happens, each premium is layered on top of the others rather than simply added side by side, which is exactly why the worked examples below walk through the math step by step.

Four Fully Worked Examples

Example 1: Ordinary Weekday With Overtime

Maria earns a daily rate of ₱610 and stays two hours past her regular shift on a normal Tuesday — no rest day, no holiday, no night differential involved.

• Hourly rate: ₱610 ÷ 8 = ₱76.25
• Base pay for the 8-hour shift: ₱610.00 × 100% = ₱610.00
• Overtime pay: ₱76.25 × 125% × 2 hours = ₱190.63
• Total pay for the day: ₱800.63

Example 2: Rest Day With Overtime and Night Differential

Jun's daily rate is ₱600. His employer schedules him to work his usual rest day for a full eight hours, plus three hours of overtime, and two of those hours fall within the 10:00 PM–6:00 AM night differential window.

• Hourly rate: ₱600 ÷ 8 = ₱75.00
• Base pay: ₱600.00 × 130% = ₱780.00
• Overtime pay: ₱75.00 × 169% × 3 hours = ₱380.25
• Night differential pay: ₱75.00 × 130% × 10% × 2 hours = ₱19.50
• Total pay for the day: ₱1,179.75

Example 3: Special (Non-Working) Holiday With Overtime

Angelo's daily rate is ₱550. He reports for work on a special non-working holiday (for example, a local fiesta declared as a special holiday), completes his regular eight hours, and renders two additional hours of overtime. He has no night differential hours this shift.

• Hourly rate: ₱550 ÷ 8 = ₱68.75
• Base pay: ₱550.00 × 130% = ₱715.00
• Overtime pay: ₱68.75 × 169% × 2 hours = ₱232.38
• Total pay for the day: ₱947.38

Example 4: Regular Holiday Falling on a Rest Day, With Overtime and Night Differential

Liza's daily rate is ₱700. A regular holiday (such as Independence Day) happens to fall on her scheduled rest day this year. She works the full eight hours plus one hour of overtime, and four of her total hours fall within the night differential window.

• Hourly rate: ₱700 ÷ 8 = ₱87.50
• Base pay: ₱700.00 × 260% = ₱1,820.00
• Overtime pay: ₱87.50 × 338% × 1 hour = ₱295.75
• Night differential pay: ₱87.50 × 260% × 10% × 4 hours = ₱91.00
• Total pay for the day: ₱2,206.75

These four examples illustrate how quickly premium pay compounds once rest days, holidays, overtime, and night differential hours overlap on the same shift. Payroll staff should always compute each premium component separately using the applicable multiplier before adding them together, rather than trying to apply a single blended rate to the whole shift.

Notice as well that in every example the base pay for the day, the overtime pay, and the night differential pay are always broken out as three distinct line items rather than merged into a single lump sum. This is not just a computational convenience — Department of Labor and Employment guidance and most collective bargaining agreements expect payslips to itemize these components separately, since each one has a different legal basis and a different multiplier. An employee reviewing a payslip that only shows a single "overtime and premium" total has no easy way to verify whether the employer applied the correct rates, which is exactly the gap this calculator is meant to close.

Who Is Exempt From Overtime Pay Rules

Not every worker is covered by the Labor Code's hours-of-work and overtime provisions. Article 82 of the Labor Code carves out several categories of employees who are excluded from the rules on overtime pay, premium pay, and related hours-of-work benefits found in Title I, Book III. Understanding these exemptions matters because misclassifying an employee — or being misclassified — can mean the difference between being entitled to overtime pay and not.

• Managerial employees. Employees whose primary duty is to manage the establishment or a department within it, who customarily and regularly direct the work of two or more employees, and who have the authority to hire, fire, or whose recommendations on those matters carry particular weight, are excluded from overtime pay. The exemption is based on the nature of the actual job function, not merely the job title — a "Team Lead" who does not truly exercise managerial discretion may still be legally entitled to overtime pay.
• Officers and members of a managerial staff. This includes employees who regularly exercise discretion and independent judgment in performing their duties, who assist a proprietor or a managerial employee, and whose work is directly related to management policies.
• Field personnel. Non-agricultural employees who regularly perform their duties away from the principal place of business and whose actual hours of work in the field cannot be determined with reasonable certainty are excluded. Classic examples include outside sales representatives and delivery personnel whose routes and schedules are not directly supervised.
• Government employees. Workers in the national government, its political subdivisions, including government-owned or controlled corporations, are governed by civil service rules rather than the Labor Code's overtime provisions.
• Domestic workers (kasambahay). Household help are covered instead by the Domestic Workers Act (Republic Act No. 10361, the "Batas Kasambahay"), which has its own separate rules on hours of work, rest periods, and pay.
• Workers paid by results. Employees whose output and pay are determined by piece-rate or similar output-based schemes are generally excluded from the overtime provisions, except in cases where the Secretary of Labor has prescribed a specific time and motion standard for a given task.
• Members of the family of the employer who are dependent on him for support. Immediate family members working for and supported by the employer fall outside the coverage of these provisions.

If you are unsure whether your role falls under one of these exemptions, look past your job title and examine your actual day-to-day authority and level of supervision. Rank-and-file employees who perform routine, supervised tasks — even those with impressive-sounding titles — are almost always still entitled to overtime, rest day, holiday, and night differential pay. A useful rule of thumb: if you clock in and clock out, if someone else approves your leave requests, and if you do not have the authority to discipline or terminate other staff, you are very likely covered by the overtime provisions no matter what your business card says. When in doubt, employees can request a copy of their job description and compare it against the criteria above, or raise the question directly with DOLE's regional office for a formal determination.

Frequently Asked Questions

Is overtime pay mandatory in the Philippines?

Yes. For employees covered by Title I, Book III of the Labor Code, overtime pay is a statutory entitlement, not a discretionary benefit. Employers cannot lawfully waive it through a company policy or an employment contract clause that pays a flat monthly salary "inclusive of overtime," unless that arrangement is properly structured and does not result in the employee receiving less than what the law requires for actual overtime rendered.

How do I compute the hourly rate from a daily rate?

Divide the daily rate by eight, since the standard work day under the Labor Code is eight hours. For example, a daily rate of ₱610 gives an hourly rate of ₱76.25. This hourly rate is then multiplied by the appropriate premium multiplier — 125% for ordinary overtime, 169% for rest day overtime, and so on — depending on the type of day.

Does overtime pay apply to monthly-paid employees, or only daily-paid ones?

It applies to both, as long as the employee is not in one of the exempt categories discussed above. Monthly-paid employees simply need their monthly salary converted into an equivalent daily rate first (commonly by multiplying the monthly rate by 12 to get the annual salary, then dividing by the applicable "factor," or number of paid days in a year — 261 for employees on a standard five-day workweek, or 313 for those on a six-day workweek), after which the same hourly-rate and multiplier method applies.

Can night shift differential and overtime pay be received for the same hours?

Yes. Night shift differential and overtime pay are two separate, independently mandated premiums that compensate for different things — one for working unsociable hours, the other for working beyond eight hours. An employee who renders overtime hours that also happen to fall between 10:00 PM and 6:00 AM is entitled to both the overtime premium and the night differential premium for those overlapping hours.

What happens if my employer has a "no overtime pay" policy?

A blanket company policy stating that no overtime will be paid, regardless of hours actually worked, does not override the Labor Code. If an employee is legally entitled to overtime pay and is required or permitted to work beyond eight hours, that employee remains entitled to the corresponding premium pay even if internal policy says otherwise. Employees in this situation may raise the matter with their HR department or file a complaint with the Department of Labor and Employment (DOLE).

Is overtime pay subject to income tax?

Generally, yes — overtime pay forms part of an employee's taxable compensation income and is subject to withholding tax under the BIR's graduated income tax table, the same way regular wages are. The main exception under the TRAIN Law is for employees classified as "minimum wage earners" (MWEs), whose basic pay, holiday pay, overtime pay, night shift differential, and hazard pay are exempt from income tax for as long as they actually hold MWE status. This is a period-by-period test, not an all-or-nothing annual one: if an MWE receives a raise partway through the year that pushes their basic pay above the applicable regional minimum wage, the overtime and other premiums they earned while they were genuinely an MWE stay exempt, but their compensation from the point their pay exceeds the minimum wage onward — including any overtime earned after that point — becomes taxable like any other employee's pay. Losing MWE status mid-year does not retroactively tax the earlier, correctly-exempt months.

What is the difference between a special (non-working) holiday and a regular holiday for pay purposes?

On a regular holiday, an employee who does not work is still entitled to 100% of their daily wage (the"no work, still paid" rule), while an employee who does work receives 200% of their daily rate. This "no work, still paid" entitlement is not entirely unconditional, though: DOLE rules require the employee to have been present, or on leave with pay, on the working day immediately preceding the regular holiday — an employee who was on unpaid leave or absent without official leave the day before generally is not entitled to holiday pay for a regular holiday they did not work. On a special (non-working) holiday, the general rule is "no work, no pay" unless a more favorable company policy or collective bargaining agreement provides otherwise; an employee who does work a special holiday receives 130% of their daily rate, or 150% if that special holiday also falls on their scheduled rest day.

Do part-time employees get overtime pay?

Part-time employees are still covered by the Labor Code's overtime provisions if they are not among the exempt categories. Overtime is triggered once actual hours worked in a day exceed eight, regardless of whether the employee's regular schedule is part-time or full-time. If a part-time employee's normal schedule is only four or six hours, hours worked beyond that agreed schedule but still within eight hours total in the day are typically treated as additional regular hours rather than overtime, unless company policy states otherwise; overtime premium specifically applies once total hours in the day exceed eight.