Computation of wages

The Department of Labor and Employment (DOLE) has set out the following rules in computing overtime pay, pay
for work done on holidays, premium on nightshift and 13 thmonth pay:

Computing Overtime:

On Ordinary Days
Plus 25% of the hourly rate multiplied by the number of hours.

On a rest day, special day or regular holiday

Plus 30% of the hourly rate on said days multiplied by the number of hours.

Computing pay for work done on:

A special day (130% x basic pay)

A special day, which is also a scheduled rest day (150% x basic pay)
A regular holiday (200% x basic pay)
A regular holiday, which is also a scheduled rest day (260% x basic pay)

Computing Night Shift Premium Where Night Shift is a Regular Work:

On Ordinary day (110% x basic hourly rate)

On a rest day, special day, regular holiday (110% of regular hourly rate for a rest day, special day, regular holiday)

Computing Overtime on Night Shift:

On ordinary day (110% x overtime hourly rate)

On rest day, special day or regular holiday (110% x overtime hourly rate for rest days, special days, regular
holidays)

Computing 13th Month Pay:

Total basic salary earned for the year exclusive of allowances, overtime, holiday, and night shift differential pay
divided by 12 months = 13th month pay.

Sample computation of Overtime Pay per Hour

Let us assume a regular daily wage rate of Php 404.00, what is the overtime rate per hour?

On Ordinary days:

First, let’s compute for the hourly wage rate as follows:

Regular hourly rate = Daily wage rate / 8 hours
= P404/8
= P50.5 per hour

Then, let’s compute for the overtime rate per hour as follows:
Overtime rate = hourly rate + 25% of hourly rate
= P50.5 + (.25 x 50.5)
=P50.5 + 12.65
=P63.125 per hour

On a rest day and special day

Computation of hourly wage rate:

Hourly rate = 130% of Regular Hourly Rate
= P50.5 x 1.3
= P65.65 per hour

Computation of overtime rate:

Overtime rate = Hourly rate + 30% of Hourly rate

= P65.65 + (30% of P65.65)
= P65.65 + P19.695
= P85.345 per hour

On a rest day which falls on a special day

Computation of hourly wage rate:

Hourly rate = 150% of Regular hourly rate
=P50.5 x 1.5
=P75.75 per hour

Computation of overtime rate:

Overtime rate = Hourly rate + 30% of Hourly rate

= P75.75 + (30% of P75.75)
= P75.75 + 22.725
= P98.475

On a regular holiday

Computation of hourly wage rate:

Hourly rate = 200% of Regular hourly rate
=P50.5 x 2
=P101 per hour

Computation of overtime rate:

Overtime rate = Hourly rate + 30% of Hourly rate

=P 101 + (30% of P101)
=P101 + 30.3
=P131.3 per hour

On a rest day which falls on regular holiday

Computation of hourly wage rate:

Hourly rate = 260% of Regular hourly rate
=P50.5 x 2.6
=P131.3 per hour

Computation of overtime rate:

Overtime rate = Hourly rate + 30% of Hourly rate
=P 131.3 + (30% of P131.3)
=P131.3 + 39.39
=P170.69 per hour

Source: Department of Labor and Employment (DOLE) Philippines