How to Compute Overtime Pay in the Philippines (2026 Guide)

How to Compute Overtime Pay in the Philippines (2026 Guide)

Overtime pay is additional compensation for covered employees who work beyond eight hours on a workday. The minimum rate depends on whether the overtime falls on an ordinary workday, a scheduled rest day, a special non-working day, or a regular holiday.

The rules and examples below are based on Article 87 of the Labor Code and the Department of Labor and Employment (DOLE) and National Wages and Productivity Commission (NWPC) Workers’ Statutory Monetary Benefits Handbook. As of October 3, 2026, the minimum overtime multipliers below remain the applicable general guide. Holiday dates and any special wage rules should be checked against the latest government advisory.

Overtime pay formula

For each overtime hour:

Overtime pay = applicable basic hourly rate × day-type multiplier(s) × overtime hours

Use the employee’s applicable basic hourly wage for the day. Payroll teams should determine the hourly equivalent using the employee’s wage basis, work schedule, applicable wage order, and any more favorable company policy, agreement, or established practice. Do not assume one monthly-to-hourly conversion applies to every employee.

Minimum overtime rates

Assuming the applicable basic hourly wage is ₱60, the minimum overtime rates are:

  • Ordinary workday: ₱60 × 125% = ₱75.00 per overtime hour
  • Scheduled rest day: ₱60 × 130% × 130% = ₱101.40 per overtime hour
  • Special non-working day: ₱60 × 130% × 130% = ₱101.40 per overtime hour
  • Special non-working day that is also the rest day: ₱60 × 150% × 130% = ₱117.00 per overtime hour
  • Regular holiday: ₱60 × 200% × 130% = ₱156.00 per overtime hour
  • Regular holiday that is also the rest day: ₱60 × 200% × 130% × 130% = ₱202.80 per overtime hour

These are minimum statutory rates for covered employees. A contract, collective bargaining agreement, company policy, or established practice may provide a higher rate. For consecutive or “double” regular holidays, check the wage advisory for the specific holiday dates rather than applying a generic multiplier.

Example: overtime on an ordinary workday

An employee’s applicable basic hourly wage is ₱60 and they work two overtime hours on an ordinary workday:

  • ₱60 × 125% = ₱75 per overtime hour
  • ₱75 × 2 hours = ₱150 total overtime pay

Example: overtime on a rest day

Using the same ₱60 basic hourly wage, an employee works two overtime hours on their scheduled rest day:

  • ₱60 × 130% × 130% = ₱101.40 per overtime hour
  • ₱101.40 × 2 hours = ₱202.80 total overtime pay

For a rest day that is also a special non-working day, the first-eight-hour premium uses 150%; the overtime formula is ₱60 × 150% × 130%, or ₱117 per overtime hour.

Who is covered?

Overtime pay coverage has statutory exclusions and depends on the employee’s actual duties and working conditions. Certain managerial employees, field personnel whose actual hours cannot be determined with reasonable certainty, and other categories identified in the rules may be treated differently. Job title alone does not decide whether someone is exempt. Employers should check the applicable Labor Code rules and DOLE guidance when classifying workers.

The general overtime rule concerns work beyond eight hours in a day. Some occupations have separate hours-of-work provisions, so payroll should verify the rule that applies to the employee’s industry and role.

Overtime and night shift differential

Covered employees who work between 10:00 p.m. and 6:00 a.m. may also be entitled to night shift differential. When overtime overlaps with those hours, payroll should compute the applicable overtime and night shift entitlements under the rules for that employee and day type; the night shift differential does not replace overtime pay.

Practical payroll checklist

  1. Confirm the employee is covered by the applicable overtime rules.
  2. Identify the correct basic hourly wage and the day type, including whether it is the employee’s scheduled rest day.
  3. Count compensable hours worked beyond the applicable daily limit.
  4. Apply the minimum multiplier for that day type, then multiply by overtime hours.
  5. Check for a higher contractual or company rate and any overlapping night shift differential.
  6. Keep accurate time and payroll records, and verify special or regular holiday rates against the applicable annual DOLE advisory.

Frequently asked questions

Is ordinary-day overtime paid at 125% or an additional 25%?

Both descriptions refer to the same minimum rate. The employee receives the basic hourly wage for the overtime hour plus at least 25% additional compensation, for a total of 125% of the hourly basic wage.

Does overtime on a rest day use the same rate as ordinary-day overtime?

No. DOLE’s handbook lists separate minimum formulas for rest days, special non-working days, and holidays. Use the applicable day-type formula in the table above.

Does working more than 40 or 48 hours in a week automatically determine overtime?

The general rule is based on work beyond eight hours a day. Some types of work have separate statutory hours-of-work rules. Do not apply a single weekly threshold to every employee without checking the applicable rule.

Can an employer pay more than the statutory minimum?

Yes. A contract, collective bargaining agreement, company policy, or established practice may provide a more favorable overtime rate.

Official references

For another payroll computation guide, see How to Compute 13th Month Pay.

This article provides general information and is not a substitute for legal or payroll advice. Check current DOLE issuances, applicable wage orders, employee coverage, and company agreements before finalizing payroll.

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