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Overtime Pay Computation Guide: Philippines (2026)
In the Philippines, working beyond the standard 8-hour shift is a common reality for many employees. However, not everyone knows exactly how much they are owed. Under the **Labor Code of the Philippines**, overtime (OT) is not just "extra pay"—it is a strictly regulated compensation structure that varies based on the day the work was performed.
This guide breaks down the updated 2026 computation standards, ensuring you or your payroll department are in full compliance with the Department of Labor and Employment (DOLE) guidelines.
1. The Foundation: Hourly Rate
Before you can calculate overtime, you must first determine your **Regular Hourly Rate**. This is derived from your Daily Wage.
Daily Rate ÷ 8 Hours = Hourly Rate
Example: If your daily rate is ₱800, your hourly rate is ₱100.
2. 2026 Overtime Rate Multipliers
The "multiplier" depends on the nature of the day. Working OT on a regular Monday is cheaper for an employer than working OT on Christmas Day (a Regular Holiday).
| Type of Workday | Work Within 8 Hours | Overtime Rate (Per Hour) |
|---|---|---|
| Regular Workday | 100% | 125% of Hourly Rate |
| Rest Day | 130% | 169% of Hourly Rate |
| Special Non-Working Holiday | 130% | 169% of Hourly Rate |
| Regular Holiday | 200% | 260% of Hourly Rate |
| Regular Holiday falling on Rest Day | 260% | 338% of Hourly Rate |
3. Detailed Sample Computations
Scenario A: Regular Day Overtime
Assume an employee with an hourly rate of **₱100** works for **10 hours** on a normal Tuesday.
- First 8 hours: ₱100 × 8 = ₱800
- OT hours (2 hours): ₱100 × 1.25 × 2 = ₱250
- Total Daily Pay: ₱1,050
Scenario B: Rest Day Overtime
Working on a rest day already grants a 30% premium for the first 8 hours. If the employee works beyond that, the OT rate is 130% of that "premium" rate.
Hourly Rate × 1.30 (Rest Day) × 1.30 (OT Premium) = 1.69 Multiplier
If the same ₱100/hour employee works 10 hours on their Rest Day:
- First 8 hours: ₱100 × 1.30 × 8 = ₱1,040
- OT hours (2 hours): ₱100 × 1.69 × 2 = ₱338
- Total Daily Pay: ₱1,378
Scenario C: Regular Holiday Overtime
Regular holidays (like Rizal Day or Independence Day) offer "Double Pay" (200%). Overtime on these days is particularly rewarding.
- First 8 hours: ₱100 × 2.00 × 8 = ₱1,600
- OT hours (2 hours): ₱100 × 2.60 × 2 = ₱520
- Total Daily Pay: ₱2,120
4. The "Night Shift Differential" (NSD) Factor
If your overtime hours fall between **10:00 PM and 6:00 AM**, you are entitled to an additional **10% Night Shift Differential**. This is compounded on top of your overtime rate.
For a regular workday, the multiplier for "Night OT" becomes **137.5%** (1.25 × 1.10).
5. Who is Exempt from OT Pay?
While most rank-and-file employees are entitled to OT pay, the Labor Code excludes certain categories:
- Managerial Employees: Those whose primary duty is management and who can hire/fire.
- Field Personnel: Employees who perform their duties away from the office and whose hours cannot be determined with reasonable certainty.
- Government Employees: They are governed by the Civil Service Commission (CSC) rules rather than the Labor Code.