Computation of premium pay

The premium pay rate is at 30% by default, and may be higher depending on the occurrence of specific circumstances.

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 Php1,000.00.

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

a. Private Sector

COMPUTATION 1: Work is done on a rest day or a special non-working day.
If there is work performed on a rest day or special non-working day, a covered employee is entitled to a premium pay of 30% of his basic wage or a total of 130%.
Formula:
day’s wage x 130% = day’s wage with premium pay
Sample computation:
Php1,000.00 x 130% = Php1,300.00
COMPUTATION 2: Work is done on a rest day falling on a special non-working day (or vice-versa).
If there is work performed on a rest day which is also a special non-working day (or vice-versa), a covered employee is entitled to a premium pay of 30% of his basic wage or a total of 150%.
Formula:
day’s wage x 150% = day’s wage with premium pay
Sample computation:
Php1,000.00 x 150% = Php1,500.00
COMPUTATION 3: Work is done on regular holiday falling on a rest day or special non-working day.
If there is work performed on a regular holiday which is also a rest day or a special non-working day, a covered employee is entitled to a premium pay of 30% of the regular holiday rate of 200% based on his/her daily basic wage or a total of 260%.
Formula:
day’s wage x 260% = day’s wage with premium pay
Sample computation:
Php1,000.00 x 260% = Php2,600.00

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In the private sector, the above discussions/computations may be superseded by any stipulation favorable to the employee via an employment contract, company policies, collective bargaining agreement, or analogous thereto.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

References

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

Book IIII, Omnibus Rules Implementing the Labor Code

2022 DOLE-BWC Handbook on Workers’ Statutory Monetary Benefits

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

 

Related

Premium pay

Computation of premium pay

FAQ: Premium pay

Cases on: Premium pay

Additional Resources

Law Mentoring Center

Department of Labor and Employment (DOLE)

DOLE – Bureau of Working Conditions

Official Gazette of the Republic of the Philippines

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.

Related content

YouTube Channel

More content

Articles

Exemplary damages

Summary ▪ Exemplary damages may be awarded if the dismissal was effected in a wanton, oppressive or malevolent manner. ▪

Certificate of employment

Summary ▪ Employers are obligated to issue a Certificate of Employment (COE) upon request. ▪ After employment, employers are required

Flexible Work Arrangements

Summary ▪ Flexible work arrangements refer to alternative arrangements or schedules other than the traditional or standard workhours, workdays, and

Certification election

The workers in a bargaining unit have the right to choose their sole and exclusive bargaining agent through the process

Videos

photo of woman using her laptop

Work from Home 101

The pandemic forced several businesses around the world to experiment work from home. In the PH, has the Telecommuting Law

man people woman office

At-will employment in PH?

At-will employment means that an employer can terminate the employment of an employee – at any time. Is this allowed

Podcasts