Computation of Overtime Pay
If covered employees perform overtime work, they are entitled to overtime pay of at least 25% their regular hourly rate.
1. Computation
These are the steps on how to compute for overtime pay.
The following are the assumptions:
1) The covered employee’s hourly rate is Php100.00.
2) The covered employee regularly works for 8 hours.
These are the steps on how to compute for overtime pay.
| Step 1: Determine the employee’s hourly rate. |
| Formula: |
| daily rate ÷ 8 hours = hourly rate |
| Sample computation: |
| Php800.00 ÷ 8 hours = Php100.00/hour |
| Step 2: To get the hourly overtime pay, compute for 25% of the hourly rate or a total of 125%. |
| Formula: |
| hourly rate x 125% = overtime hourly rate |
| Sample computation: |
| Php100.000/hour x 125% = Php125.00/hour |
| Step 3: Multiply the overtime hourly rate against the hours worked (e.g. 2 hours). |
| Formula: |
| overtime hourly rate x 2 hours of work = pay with overtime pay |
| Sample computation: |
| Php125.00/hour x 2 hours = Php250.00 |
| Step 4: Add pay with overtime pay for ordinary hours rendered (e.g. 6 hours). |
| Formula: |
| pay with overtime pay + pay for ordinary hours = day’s wage |
| Sample computation: |
| Php250.00 + Php600.00 = Php850.00 |
(2024 DOLE-BWC Handbook on Workers’ Statutory Monetary Benefits or “DOLE-BWC Handbook”, pp. 21-22)
b. COLA
Whether cost of living allowance (COLA) is included in overtime pay computation is unclear after the release of the 2023 DOLE-BWC Handbook.
In the 2022 DOLE-BWC Handbook, it provided that “COLA shall not be included in the computation of overtime pay. Thus, COLA was excluded.
However, the 2023 DOLE-BWC Handbook removed the above statement and is silent on whether COLA is still excluded.
