Labor Standards

Computation of night shift differential pay

The night shift differential pay is at 20% for those in the Government Service, while 10% for those in the private sector.

1. Computation

These are the steps on how to compute for the night shift differential pay.

The following are the assumptions:

1) The employee’s daily rate is Php800.00.

2) The employee works for 8 hours, including 2 hours covered by night shift pay.

a. Private Sector

STEP 1: Divide the daily rate with eight hours – to get the hourly rate.
Formula:
daily rate ÷ 8 hours = hourly rate
Sample computation:
Php800.00 ÷ 8 hours = Php100.00/hour
STEP 2: Multiple the hourly rate by the applicable rate – to get the night shift hourly rate.
For the private sector, it is 10% of the hourly rate or a total of 110%.
⦁ Formula:
hourly rate x 110% = night shift hourly rate
⦁ Sample computation:
Php100.000/hour x 110% = Php110.00/hour
STEP 3: Multiply the night shift hourly rate by the hours worked – to get the night shift pay.
⦁ Formula:
night shift hourly rate x 2 hours of work = pay with night shift differential
⦁ Sample computation:
Php110.00/hour x 2 hours = Php220.00
STEP 4: Add night shift pay to pay for ordinary hours rendered – to get to the day’s wage.
⦁ Formula:
pay with night shift differential + pay for ordinary hours = day’s wage
⦁ Sample computation:
Php220.00 + Php600.00 = Php820.00

b. Government service

STEP 1: Divide the daily rate with eight hours – to get the hourly rate.
Formula:
daily rate ÷ 8 hours = hourly rate
Sample computation:
Php800.00 ÷ 8 hours = Php100.00/hour
STEP 2: Multiple the hourly rate by the applicable rate – to get the night shift hourly rate.
For the Government service, it is 20% of the hourly rate or a total of 120%.
⦁ Formula:
hourly rate x 120% = night shift hourly rate
⦁ Sample computation:
Php100.000/hour x 120% = Php120.00/hour
STEP 3: Multiply the night shift hourly rate by the hours worked – to get the night shift pay.
⦁ Formula:
night shift hourly rate x 2 hours of work = pay with night shift differential
⦁ Sample computation:
Php120.00/hour x 2 hours = Php240.00
STEP 4: Add night shift pay to pay for ordinary hours rendered – to get to the day’s wage.
⦁ Formula:
pay with night shift differential + pay for ordinary hours = day’s wage
⦁ Sample computation:
Php240.00 + Php600.00 = Php840.00

2. COLA, excluded

Cost of living allowance is not included in the computation. (2022 DOLE-BWC Handbook on Workers’ Statutory Monetary Benefits)

3. Favorable stipulation in favor of the employee

a. Private Sector

In the private sector, the above discussions/computations may be superseded by any stipulation favorable to the employee via an employment contract, company policies, collective bargaining agreement, or analogous thereto.

For instance, the employer and the employee may stipulate in an employment contract that rate for night shift differential pay will be 20%, instead of the Labor Code’s 10%. If this is the case, then rate of the night shift differential pay will follow the 20%.

Similarly, the same rule will apply if such a stipulation is found in the company policies, collective bargaining agreement (CBA), or any other employment agreement.

Related

Night shift differential pay

FAQ: Night shift differential

Cases on: Night shift differential

⦁ Is equal protection violated for night shift pay between public and private employees?

References

Presidential Decree No. 442, a.k.a. Labor Code of the Philippines

Book IIII, Omnibus Rules Implementing the Labor Code

Republic Act No. 11701

2022 DOLE-BWC Handbook on Workers’ Statutory Monetary Benefits

⦁ Cited Labor Law Jurisprudence (a.k.a. Supreme Court Decisions)

Disclaimer: All information is for educational and general information only. These should not be taken as professional legal advice or opinion. Please consult a competent lawyer to address your specific concerns. Any statements or opinions of the author are solely his own and do not reflect that of any organization he may be connected.

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