However health personnel in cities and municipalities with a population of at least one million, or in hospitals and clinics with a bed capacity of at least one hundred may be required to work additional hours where exigencies of the service require. What is the computation for overtime pay on a regular work day?Here's a sample computation based on the given values (monthly rate: Php18,000; factor rate: 258; 246 total regular days + 12 regular holidays): Daily rate: 18,000 x 12 / 258= Php837.21Hourly rate (8 hours): 837.21 / 8= Php 104.65, Number of hours in excess of 8 hours (125% x hourly rate x number of hours rendered)Overtime hourly rate: 1.25 x 104.65= Php 130.81/hour, What is the computation for overtime pay on a rest day? Knowing the level of compensation your employees should receive if they work the extra hours on regular workdays and holidays helps you establish a reputable image for your business. *same monthly rate applied in the computation, Special day: (130% x basic pay)18,000 x 1.3 = Php23,400Special day premium pay: (i.e., 20 working days/month): 23,400/20=Php 1,170/day, Special day that coincided with a scheduled rest day: (150% x basic pay)18,000 x 1.5 = Php 27,000Special and rest day premium pay (i.e., 20 working days/month): 27,000/20= Php 1,350/day, What is the computation for overtime pay on a regular holiday? In line with that, you should pay for their rendered service in … Processing of Payroll Overtime pay rates depend upon the the day the work is performed, whether it is ordinary working day, special day, regular holiday or rest day. Ordinary day Overtime. However, not all employees are entitled to night shift differential. N ight Shift Differential (NSD) refers to the additional compensation of ten percent (10%) of an employee’s regular wage for each hour of work performed between 10 p.m. and 6 a.m. Generally, all employees are entitled to night shift differentials, except the following: Employees are required by law to have at least one day (a full 24 hours) off every week. Further, the daily hours’ limit in the Labour Code does not apply to government employees, managerial employees, field personnel, employer’s family members, domestic helpers, and personal service providers. Employees working anytime from 10 o’clock in the evening to 6 o’clock in the morning qualifies for the Night Shift Differential (NSD). Deduction of undertime must be based on the employee’s tardiness and salary. Source: Article 86, Labor Code of the Philippines Night Shift Differential in the Philippines WHAT IS NIGHT SHIFT DIFFERENTIAL Article 86 of our labor provides that every employee shall be paid a night shift differential of not less than ten percent (10%) of his regular wage for each hour of work performed between ten o’clock in … Regional Office No. Cottage and handicraft For example, on average, the minimum daily payroll in the Phili… Every employee shall be paid a night shift differential of not less than ten percent (10%) of his regular wage for each hour of work performed between ten o’clock in the evening and six o’clock in the morning. Can employers/business owners require their employees to render overtime work?The law does not encourage employers/business owners to ask their employees to do overtime work. It further provides that any employee may be required by the employer to perform overtime work in any of the following cases: in the case of national emergency or force majeure; urgent work in order to avoid serious loss or damage to the employer; work necessary to prevent loss or damage to perishable goods; and were the completion or continuation of the work is necessary to prevent serious obstruction or prejudice to the business or operations of the employer. Where an employee is made or permitted to work on his scheduled rest day or a special day, he is paid an additional compensation of at least 30% of his regular wage (130% of the normal wage rate). This extra pay needs to be added into the Regular Rate to make the overtime rate bigger. 87. Overtime pay rates are covered under the Labour Code. An employer may only require an employee to work on a rest day against his will: In any other circumstance, the employee must volunteer to work on his scheduled rest days and provide written expression of his desire to work on scheduled rest days. When they work the evening shift, they are paid a shift differential of $1 an hour. The employer cannot use the offset to keep the company from compensating the employee with required overtime rates. Night work is regulated under the Labour Code which provides for a night shift differential. When they work the night shift they are paid a shift differential of $2 an hour. The amount of 13 th month pay shall at least be 1/12 of the total basic salary earned for the year which shall n include all earnings paid by his/her employer for services rendered but does not include allowances and other monetary benefits such as the cash equivalent of unused vacation and sick leave credits, overtime, premium, night shift differential, holiday pay and COLA. Night shift differential. A prevailing rate employee is entitled to a night shift differential when the majority of hours worked during a regularly scheduled nonovertime shift occur in either of these two shifts: "Majority of hours" means a number of whole hours greater than one-half (including meal … An employee is entitled to night pay for those hours that must be worked between 6 p.m. and 6 a.m. to complete an 8-hour daily tour of duty. To determine the employee Night Differential pay: Special Holiday Night Differential = (Hourly rate × 130% × 10% × 8 hours) Php 59.28 = (Php 57.00 × 1.3 × 0.10 × 8 hours) Special Holiday and at the same time Rest day Night Shift. Regular holidays, such as Labor Day and Independence Day, tend to have fixed dates and are present ye… The worker should be paid overtime pay, equivalent to 125% of his usual rate per hour. 4 Simple Charts to explain Philippines Premium Pay Rate FIND OUT THE OVERTIME PAY RATE, NIGHT SHIFT DIFFERENTIAL PAY RATE, REST DAY PAY RATE AND HOLIDAY PAY RATE. Mywage.org/Philippines is connected to the WageIndicator Network. The personal and additional exemptions of employees previously available under R.A. 9504 were also removed. Under R.A. 9504 overtime pay, night shift differential pay and hazard pay received by such minimum wage earners are exempt from income tax (Section 2, R.A. 9504). The list includes managers, field personnel, domestic helpers, workers who are hired for personal service of another, members of the employer's family who depend on employees for support, and workers whose compensation is results-based. Art. Powered by the WageIndicator Foundation - Share and compare wages, understand Labour Laws and spot career opportunities. The employee will be paid according to the hours of work or rendered service. Employees working anytime from 10 o’clock in the evening to 6 o’clock in the morning qualifies for the Night Shift Differential (NSD). Overtime pay for work beyond eight hours Night shift differential at 10% increment for work done from 10:00 PM to 6:00 AM Minimum wage earners in the Philippines are not subject to withholding tax and are not required to file income tax returns at the end of the year for obviously, they, will not be any tax due under such exemption. Working hours in the Philippines cannot exceed eight hours in a day, not including the mandatory one-hour lunch break. As far as the rate of night work is concerned, night shift employees must be paid a differential of at least 10% of the regular wage for each hour of work performed between 10:00 p.m. and 6:00 a.m. Category My PayrollHero Account, Payroll, Philippine Payroll Regulations and Information Every employee is entitled to a Night Differential or Night shift pay of not less than 10% of his regular wage for each hour of work performed between 10pm and 6am. COLA is not included in overtime calculation. Is it a rest day, a regular holiday, or a special non-working day? Can an employee demand overtime work from the employer?The employee cannot urge or oblige the employer to let him or her to render overtime work if it is not required by the circumstance or there is no extra work to be done. 22009 Guidelines on the Adoption of Flexible Work Arrangements Part III, point 1. The Law does not provide a limit on overtime work. Overtime Work Work may be performed beyond eight hours a day provided that the employee is paid for the overtime work, which consists of an additional compensation equivalent to his regular wage plus at least 25% thereof. Knowing the level of compensation your employees should receive if they work the extra hours on regular workdays and, helps you establish a reputable image for your business. However, suppose the employee also earns a shift differential for working weekends or the night shift, or a performance bonus, or a commission. The maximum working hours on such days cannot exceed 12 hours per day. Art. Night Shift Differential (NSD) refers to the additional compensation of ten percent (10%) of an employee’s regular wage for each hour of work performed between 10 p.m. and 6 a.m. On an ordinary day, the overtime rate per hour is determined as follows: If a worker works on a regular holiday, he is paid an additional compensation of at least 100% of his regular wage (200% of the normal wage rate). Source: §91-94 of the Labour Code, as amended, Living and Working during the Coronavirus Pandemic - Link me to the Covid 19 Survey and Daily Updates, Cite this page © WageIndicator 2021 - Mywage.org/Philippines -, Living and Working during the Coronavirus Pandemic, Survey on Living and Working in Philippines during Coronavirus, Coronavirus Work & Life in Maps and Graphs - updated daily, Daily updated Maps on Living and Working during Coronavirus, Daily updated Graphs on Living and Working during Coronavirus. If the employee is late for 1 minute, the deduction must not be based more than 1 minute. A shift differential is an extra bump in pay that some workers make for working outside of normal business hours. 87. For example, the employee is paid $10.00 per hour plus a $2.00 per hour shift differential for the night shift. However, suppose the employee also earns a shift differential for working weekends or the night shift, or a performance bonus, or a commission. What is the overtime pay computation for employees working on a night shift during a regular workday? 6727, and vary depending on the sales of the company as well as the number of employees. A child below 15 years cannot work for more than 4 hours a day, while adolescents (15 and 18 years) cannot work for more than 8 hours a day. An employee is entitled to night pay for any nonovertime work performed between 6 p.m. and 6 a.m. during designated core hours. If your employee works beyond eight hours, you must pay overtime wages. Since differential pay is company policy, not something regulated by the government, there’s no standard way to pay it. Moreover, work hours may fall under different categories, making computation more complex. What is the overtime pay computation for employees working on a night shift during a rest day? Overtime work. This website does not show any ads or advertising materials for an ad-free reading experience of the readers. Read also: Can Employees Be Compelled To Render Overtime Work? Weekends–Saturday and Sunday–are usually allotted as rest days. Night shiftdifferential. Women and young persons are prohibited from night work. Moreover, under time work on a day cannot be offset by overtime work on another day. Shift differentials aren’t required by federal law, but many companies, especially in the manufacturing industry, offer them as a way of encouraging employees to take an “undesirable” shift such as the night shift or a weekend shift. What is the overtime pay computation for employees working on a night shift during a rest day? Night shift differential is from 10pm to 6am the following day. Art. Labour Code (Presidential decree No. Under Philippine labor laws, an employee who works between 10 p.m to 6:00 a.m. should be paid a night shift differential of not less than ten percent (10%) of his regular wage. Let say the employee hourly rate is Php 57.00/hour and working from 10pm to 6am; To determine the employee Night Differential pay: Special Holiday Rest day Night Differential = (Hourly … Industry sectors are segmented as follows: 1. Accordingly, they are not entitled to holiday pay, overtime pay, premium pay, night shift differential pay, and service incentive leave. Calculating for your employees’ overtime, holiday, rest day, and/or night differential premiums is not a walk in the park. How to Compute Overtime Pay All employees required to work beyond the normal 8 hours are entitled to overtime. 86. In line with that, you should, If the country is at war or declared to be under national or local emergency, If overtime work can help save lives or properties in face of danger to public safety due to emergencies caused by fire, natural disasters, or serious accidents, If work started before the 8th hour needs to be completed or continued to avoid grave obstruction or to prevent prejudice to the business or operations, If overtime work is needed to achieve good weather or environmental conditions and the quality of work and performance depend on these conditions, If urgent work needs to be done on equipment, installations, and machinery to avoid loss or damage, If work is required to preserve perishable goods or prevent its loss. However, the following employees are NOT entitled to … “Article 82 of the Labor Code states that the provisions of the Labor Code on working conditions and rest periods shall not apply to managerial employees. Rest periods of short duration during working hours are regarded as hours worked. In line with that, you should pay for their rendered service in accordance with the labor codes. The Trade Union Congress of the Philippines (TUCP) has thrown its support behind two House bills seeking to exclude from income taxes all overtime and graveyard shift differential pay received by salaried employees, including the country’s 1.1 million business process outsourcing (BPO) workers who perform jobs all day and all night. If the day factor is 365, rest day is paid even when no work is done. Under certain conditions and circumstances, however, employers may require overtime work: Can an employee offset his or her filed undertime with overtime work?The undertime cannot be offset with overtime. Law on Night Shift Differential in the Philippines WHAT IS NIGHT SHIFT DIFFERENTIAL Article 86 of our labor provides that every employee shall be paid a night shift differentialof not less than ten percent (10%) of his regular wage for each hour of work performed between ten o’clock in the evening and six o’clock in the morning. Article 86 of Philippine Labor Code states, “Every employee shall be paid a night shift differential of not less than ten percent (10%) of his regular wage for each hour of work performed between ten o’clock in the evening and six o’clock in the morning.” How many hours are allowed for overtime work?Employees can render up to eight (8) hours of overtime work. However, kasambahay under the age of 18 years are not allowed to work more than 8 hours a day, 5 days a week, exclusive of 1 hour breaks for each regular meal of the day. The overtime rate is 125% of the normal hourly wage rate if overtime work is performed on an ordinary working day (100 (assumed normal hourly wage)*125%); The overtime rate is 169% of the normal hourly wage rate if the overtime work is performed on a special day or scheduled rest day (100 (assumed normal hourly wage)*130%*130%); The overtime rate is 195% of the normal hourly wage rate if the overtime work is performed on a special day which falls on a scheduled rest day (100 (assumed normal hourly wage)*130%*150%); The overtime rate is 260% of the normal hourly wage rate if the overtime work is performed on a regular holiday (100 (assumed normal hourly wage)*130%*200%); The overtime rate is 338% of the normal hourly wage rate if overtime work is performed on a regular holiday which falls on a scheduled rest day (100 (assumed normal hourly wage)*130%*260%); In case of actual or impending emergencies caused by serious accident, fire, flood, typhoon, earthquake, epidemic or other disaster or calamity to prevent loss of life and property, or imminent danger to public safety;, In cases of urgent work to be performed on the machinery, equipment, or installation, to avoid serious loss which the employer would otherwise suffer;, In the event of abnormal pressure of work due to special circumstances, where the employer cannot ordinarily be expected to resort to other measures;, To prevent loss or damage to perishable goods;, Where the nature of the work requires continuous operations and the stoppage of work may result in irreparable injury or loss to the employer; and. 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