How to Compute Overtime Pay in the Philippines (With Examples)

Many Filipino workers put in extra hours but are not sure how much they should actually be paid. Overtime pay in the Philippines follows specific rules set by the Labor Code, and the rates change depending on whether you work on a regular day, a rest day, or a holiday. This guide walks you through the computation step by step so you can check your own payslip.

When does overtime start?

Under Article 87 of the Labor Code, any work performed beyond eight hours in a day is considered overtime. The key word is "beyond" — if you work exactly eight hours, there is no overtime. Your employer must pay you your regular wage plus at least 25% for every overtime hour on a regular working day. For example, if your hourly rate is PHP 80, your overtime hourly rate would be PHP 80 plus PHP 20 (25% of 80), which equals PHP 100 per overtime hour.

Overtime on rest days and holidays

If you work overtime on a rest day or a holiday, the premium goes up. Instead of 25%, you are entitled to an additional 30% on top of the applicable holiday or rest day rate. For instance, if you work on a regular holiday (which already pays 200% of your daily rate), your overtime rate for that day would be the holiday rate plus 30%. The exact computation depends on the type of day, which is why it helps to know the base rates for holidays and rest days covered in the next sections.

Night shift differential

Under Article 86 of the Labor Code, if you work between 10:00 PM and 6:00 AM, you are entitled to a night shift differential of at least 10% of your regular wage for each hour worked during that window. This applies on top of any overtime or holiday premium. So if you work overtime hours that fall between 10 PM and 6 AM, you receive both the overtime premium and the night differential. Many workers do not realize these stack — check your payslip carefully.

Undertime cannot offset overtime

Article 88 of the Labor Code is clear: undertime work on any particular day cannot be offset by overtime work on any other day. This means if you worked only six hours on Monday and ten hours on Tuesday, your employer cannot cancel out the two overtime hours on Tuesday by saying you were two hours short on Monday. Each day stands on its own. You are owed overtime for Tuesday regardless of what happened on Monday.

Who is exempt from overtime pay?

Not every worker is entitled to overtime pay. Under Article 82, the following are exempt: government employees (covered by civil service rules), managerial employees (those who primarily manage a department or subdivision and have the authority to hire or fire), field personnel (those who perform work away from the office and whose hours cannot be determined with reasonable certainty), and domestic workers or kasambahay (who have separate rules under RA 10361). If your employer classifies you as "managerial" to avoid paying overtime, but your actual duties are not managerial, that classification can be challenged.

Compressed workweek arrangements

Under DOLE Department Advisory No. 02-04, some companies adopt a compressed workweek — for example, four days at 10 hours per day instead of five days at 8 hours. In a valid compressed workweek arrangement, the extra two hours per day are not treated as overtime because the total weekly hours remain at or below 48. However, this arrangement must be voluntary and approved by DOLE. If your employer simply forces you to work 10-hour days without a proper compressed workweek policy, those extra hours count as overtime.

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