Overtime Pay Computation Philippines 2025: Formula, Rates, and Examples
Overtime pay computation in the Philippines is a key part of payroll. Employees who work more than 8 hours a day must receive extra pay. Therefore, both employees and employers need to understand the correct overtime rules.
💡 Instead of calculating manually, you can try the Suweldo Calculator. It provides instant overtime pay, holiday pay, and night differential results.
Formula for Overtime Pay Computation
To compute overtime pay, you can use this simple formula:
OT Pay = (Hourly Rate × Overtime Rate) × Number of OT Hours
- Hourly Rate = Monthly Salary ÷ 26 (workdays) ÷ 8 hours
- Overtime Rate = depends on the type of day (see table below)
As a result, the exact pay varies depending on whether the work is done on a regular day, rest day, or holiday.
Overtime Pay Rates Philippines 2025
| Work Schedule | Overtime Rate |
|---|---|
| Regular Workday OT | 125% of hourly rate (1.25x) |
| Rest Day / Special Day OT | 130% of hourly rate (1.30x) |
| Regular Holiday OT | 200% of hourly rate (2.00x) |
| Regular Holiday + OT beyond 8 hrs | 260% of hourly rate (2.60x) |
| Night Differential (10 PM – 6 AM) | Additional 10% of hourly rate |
In addition, keep in mind that holiday overtime is the highest. On the other hand, regular workday OT is the most common.
Overtime Pay Computation Examples
1. Regular Workday Overtime
- Monthly Salary: ₱20,000
- Hourly Rate = 20,000 ÷ 26 ÷ 8 = ₱96.15
- OT Rate = ₱96.15 × 1.25 = ₱120.19
- For 2 hours OT → ₱240.38
2. Rest Day Overtime
- Monthly Salary: ₱25,000
- Hourly Rate = ₱120.19
- OT Rate = ₱120.19 × 1.30 = ₱156.25
- For 3 hours OT → ₱468.75
Here, you can see that OT on a rest day is higher compared to a regular day.
3. Holiday Overtime Computation
- Monthly Salary: ₱18,000
- Hourly Rate = ₱86.54
- Holiday Rate = ₱86.54 × 2.00 = ₱173.08
- OT Rate (beyond 8 hrs) = ₱173.08 × 1.30 = ₱224.99
- For 2 hours OT → ₱449.98
Therefore, employees who work on holidays benefit from significantly higher pay.
4. Overtime with Night Differential
- Monthly Salary: ₱30,000
- Hourly Rate = ₱144.23
- OT Rate = ₱144.23 × 1.25 = ₱180.29
- Night Differential = ₱144.23 × 0.10 = ₱14.42
- Combined Rate = ₱194.71
- For 2 hours OT → ₱389.42
In fact, combining overtime with night differential makes late-night shifts more rewarding.
FAQs on Overtime Pay in the Philippines
1. Who gets overtime pay?
Rank-and-file employees qualify. Supervisors and managers usually do not.
2. Is overtime pay required by law?
Yes. Employers must pay OT if work goes beyond 8 hours.
3. How does night differential affect overtime?
It adds 10% of the hourly rate between 10 PM and 6 AM, therefore increasing the total OT rate.
4. What if a holiday falls on a rest day?
The computation goes higher: Holiday (200%) + Rest Day (30%) = 260%.
5. Can overtime hours be exchanged for time-off?
Yes, but only if company policy or a union agreement allows it. Otherwise, employers pay in cash.
📌 Final Tip: Overtime pay computation can be confusing. However, using the Suweldo Calculator makes the process faster, clearer, and more accurate.