The normal hours of work of an employee shall not exceed eight hours a day, and work rendered beyond eight hours (overtime) must be paid an additional premium on top of the regular hourly rate. On an ordinary working day, overtime work is paid the regular hourly rate plus at least twenty-five percent (25%) of that rate. When the overtime is performed on a rest day, a special day, or a regular holiday, the premium is higher, at least thirty percent (30%) of the hourly rate on that day, computed on the already-increased base for that kind of day. The building blocks are: the regular hourly rate; the day type (ordinary, rest day, special non-working day, or regular holiday), which sets the base pay for the day; and then the overtime premium (25% ordinary, 30% otherwise) applied to the applicable hourly rate. For night shift work (between 10 p.m. and 6 a.m.), a separate night shift differential of at least ten percent (10%) also applies, and can stack with overtime. Undertime on one day cannot be offset against overtime on another. Certain employees are not entitled to overtime pay, including managerial employees, other officers or members of the managerial staff, field personnel whose time cannot be determined with reasonable certainty, and some others the rules specify. So overtime is compensated at a premium that scales up on rest days and holidays, and understanding the layering of premiums is key to computing the correct pay.
The Basic Rule
Normal work is eight hours a day. Overtime (beyond eight hours) on an ordinary day is paid the hourly rate plus at least 25%.
Higher Premiums on Rest Days/Holidays
Overtime on a rest day, special day, or regular holiday is paid a premium of at least 30%, computed on the already-increased hourly rate for that day.
Layering and Exemptions
A night shift differential (at least 10%, 10pm–6am) can stack with overtime. Undertime cannot offset overtime. Managerial employees, managerial staff, and field personnel are generally not entitled to overtime pay.
Practical Takeaways
- Overtime = +25% on ordinary days, +30% on rest days/holidays;
- Night differential (10%) can stack;
- Managers and field personnel generally get no overtime pay.
Frequently Asked Questions
How much is overtime pay? On an ordinary working day, overtime is paid the regular hourly rate plus at least 25%. On a rest day, special day, or regular holiday, the premium is at least 30% of the applicable hourly rate for that day.
Does night work add to overtime pay? Yes. A night shift differential of at least 10% applies to work between 10 p.m. and 6 a.m., and it can stack with overtime premiums when applicable.
Can my employer offset my undertime against overtime? No. Undertime on one day cannot be offset against overtime work on another day. They are computed separately.
Who is not entitled to overtime pay? Managerial employees, other officers or members of the managerial staff, and field personnel whose hours of work cannot be determined with reasonable certainty, among others the rules specify.
This commentary is for general informational purposes only and does not constitute legal advice. For guidance specific to your situation, please consult a licensed attorney.
If you have questions about your rights or options under Philippine law, our firm is available to assist. You may reach us via Viber or WhatsApp, call us at 0995 433 5550, or send an email to vivasnobles@gmail.com. We look forward to hearing from you.