Overtime pay is the additional compensation for work beyond eight hours in a workday. Under Article 87 of the Labor Code, the minimum premium is 25% on an ordinary working day and 30% on a rest day, special day, or regular holiday. The premium is applied to the rate payable for the first eight hours of that day, which is why the effective rates climb quickly.
The most common mistake is treating every overtime hour as 125%. That only works on an ordinary day. A rest-day overtime hour is 169%, a regular-holiday overtime hour is 260%, and a regular holiday that falls on a rest day reaches 338%.
This guide walks through the overtime computation from the basic hourly rate to the final peso. If you only need to know how much overtime pay is due in the Philippines, the overtime calculator gives it in one screen. The sections below show the same steps payroll teams use, so you can check what a payslip should reflect.
The overtime pay formula
Start with the basic hourly rate. Multiply it by the multiplier for the day, then by the number of overtime hours:
overtime pay = basic hourly rate × overtime multiplier × OT hours
The multiplier already includes the premium for the day, so do not add a separate rest-day or holiday rate on top of it. Use 125% on an ordinary day, 169% on a rest day or on a special non-working day that is not also a rest day, 195% when a special day falls on a rest day, and 260% on a regular holiday.
The 169% and 195% figures only look odd until you split them into the two layers they are built from. Read every percentage as a decimal and the layers multiply cleanly. The first eight hours set the day rate: 1.00 on an ordinary day, 1.30 on a rest day, 1.50 when a special day falls on a rest day, and 2.00 on a regular holiday. Overtime then multiplies that day rate by 1.30, or by 1.25 on an ordinary day, where the 25% premium applies to the basic rate. So 1.30 × 1.30 = 1.69, or 169%, on a rest day; 1.50 × 1.30 = 1.95, or 195%, when a special day falls on a rest day; 2.00 × 1.30 = 2.60, or 260%, on a regular holiday; and 1.00 × 1.25 = 1.25, or 125%, on an ordinary day. The table below adds the remaining combinations, including double holidays.
Overtime pay: DOLE statutory minimums by day type
| Worked on | First 8 hours | OT per hour |
|---|---|---|
| Ordinary working day | 100% | 125% |
| Rest day or special non-working day | 130% | 169% |
| Special non-working day + rest day | 150% | 195% |
| Double special non-working day | 150% | 195% |
| Double special non-working day + rest day | 195% | 253.5% |
| Regular holiday | 200% | 260% |
| Regular holiday + rest day | 260% | 338% |
| Double regular holiday | 300% | 390% |
| Double regular holiday + rest day | 390% | 507% |
Night differential adds 10% to the applicable rate for work between 10 p.m. and 6 a.m. These are statutory minimums; a CBA or company policy may provide more.
Step 1: How to compute overtime pay per hour
For a daily-paid employee, divide the daily basic rate by eight. If the daily rate is ₱1,000, the hourly rate is ₱125.
For a monthly-paid employee, the conversion depends on the divisor your company uses. A common formula is:
monthly basic × 12 ÷ divisor ÷ 8 = hourly rate
With a ₱30,000 monthly basic salary and the DOLE monthly-paid factor of 365 days, the hourly rate is about ₱123.29. Employers that convert monthly pay using paid working days may use a lower divisor, such as 313 or 261. The divisor is not universal; see the monthly-paid vs daily-paid guide before assuming one.
Start from the applicable wage base
Use the basic or regular wage under your contract, CBA, and payroll rules. Do not enter unrelated reimbursements or non-wage benefits. Some allowances may be integrated into the wage base by law, agreement, or established practice, so check how your employer treats them before entering a rate.
Step 2: Apply the day rate
The first eight hours are paid at the day rate. If the employee works more than eight hours, only the excess hours get the overtime multiplier.
- Ordinary day: first 8 hours at 100%, overtime at 125%.
- Rest day or special non-working day: first 8 hours at 130%, overtime at 169%.
- Special non-working day on a rest day: first 8 hours at 150%, overtime at 195%.
- Double special non-working day on a rest day: first 8 hours at 195%, overtime at 253.5%.
- Regular holiday: first 8 hours at 200%, overtime at 260%.
- Regular holiday on a rest day: first 8 hours at 260%, overtime at 338%.
Step 3: Work through an example
Take a daily-paid employee with a ₱1,000 basic daily rate. The hourly rate is ₱125.
Two overtime hours on an ordinary day
₱125 × 125% × 2 = ₱312.50 in overtime pay. Add the ₱1,000 for the first eight hours, and the total value of the day is ₱1,312.50.
Two overtime hours on a rest day
The first eight hours are paid at 130%, or ₱1,300. The two overtime hours are paid at 169%: ₱125 × 169% × 2 = ₱422.50. Total value of the day: ₱1,722.50.
Two overtime hours on a regular holiday
The first eight hours are paid at 200%, or ₱2,000. The two overtime hours are paid at 260%: ₱125 × 260% × 2 = ₱650. Total value of the day: ₱2,650.
How much is overtime pay in the Philippines?
The overtime rate per hour in the Philippines depends on the day type and the basic rate. With a ₱1,000 daily basic rate, which is ₱125 per hour, the pay works out as follows:
| Day type | OT rate per hour | Pay per OT hour |
|---|---|---|
| Ordinary working day | 125% | ₱156.25 |
| Rest day or special non-working day | 169% | ₱211.25 |
| Special day on a rest day | 195% | ₱243.75 |
| Double special day on a rest day | 253.5% | ₱316.88 |
| Regular holiday | 260% | ₱325.00 |
| Regular holiday on a rest day | 338% | ₱422.50 |
Night differential adds another 10% to those amounts for work between 10 p.m. and 6 a.m. That is why there is no single overtime rate in the Philippines: the day type and the time of day both change it.
How to compute overtime pay on a rest day in the Philippines
Rest-day overtime uses 169% because the rest-day rate of 130% is applied first, then the 30% overtime premium on top of it: 1.30 × 1.30 = 1.69. Work beyond eight hours is not paid at 125% simply because it is extra time.
Take a ₱1,000 daily rate and a 10-hour rest-day shift. The first eight hours are 8 × ₱125 × 130% = ₱1,300. The two overtime hours are ₱125 × 169% × 2 = ₱422.50, for a total of ₱1,722.50. Only the employer-designated rest day counts, so confirm the schedule before using the 169% rate. The rest day and special day guide covers the 150% and 195% combinations.
Holiday pay overtime: 260% and 338%
Holiday pay overtime is computed on the holiday rate, not on the ordinary basic rate. Article 87 adds 30% to the 200% holiday rate, so the overtime rate is 2.00 × 1.30 = 2.60, or 260%, for every overtime hour. If the regular holiday is also the scheduled rest day, the first eight hours are 260% and the overtime rate is 338% (2.60 × 1.30 = 3.38).
The holiday pay and overtime guide includes the 390% double-holiday rates and a payslip checklist.
The 30% rule is not optional
Article 87 requires an additional 30% for overtime on a holiday or rest day. Some online examples incorrectly apply 25% there. Use 30% for any overtime that falls on a rest day, special day, or regular holiday.
Night differential is a separate addition
Work between 10 p.m. and 6 a.m. earns an additional 10% night differential. It is computed on the applicable rate for the hour, so it stacks with the day and overtime premiums. Ordinary overtime at night is 1.25 × 1.10 = 1.375, or 137.5%, not 135%.
For a fuller explanation, read the night differential guide.
DOLE overtime computation and mandatory overtime
The DOLE overtime computation follows Articles 87 to 89 of the Labor Code. Article 87 sets the 25% and 30% premiums, Article 88 prohibits offsetting undertime with overtime on another day, and Article 89 lists the emergencies and exceptional cases in which an employer may require overtime.
The computation of overtime pay DOLE publishes in its handbook applies the premium to the rate for the first eight hours, then adds night differential on the applicable rate. We did not identify an official DOLE calculator in the sources reviewed; DOLE publishes the formulas and guide computations in its Workers’ Statutory Monetary Benefits handbook instead. Outside the Article 89 cases, overtime is generally voluntary, but whether declining it can lead to discipline depends on the contract, CBA, company rules, and the facts of the work. The overtime pay DOLE requires is still due for hours actually worked, whether or not the employee volunteered.
Is overtime pay taxable in the Philippines?
Overtime pay forms part of compensation, so it can be subject to income tax and withholding. The treatment depends on your tax status, your total income, and whether you are a minimum wage earner. This guide and the calculator show gross statutory pay only; they do not compute tax, SSS, PhilHealth, or Pag-IBIG contributions. Check the current BIR rules or ask your payroll team.
Overtime vs over time
Overtime is one word for extra hours and the pay for them. Over time is two words when it means gradually or across a period. Payslips and DOLE issuances use overtime, so a search for over time pay usually means overtime pay.
What about monthly-paid employees?
A monthly salary already covers the first eight hours of a normal workday. The total value of the day and the additional pay are therefore different numbers. On an ordinary eight-hour day, a monthly-paid employee receives no extra pay beyond the monthly salary. On a rest day, the additional amount is the 30% premium; on a regular holiday, it is the 100% holiday premium.
Our monthly vs daily guide walks through the numbers, and the calculator shows both figures.
Common computation mistakes
- Using 125% for overtime on a rest day or holiday.
- Applying the 25% premium to the holiday rate instead of 30%.
- Treating every Sunday as a rest day when the rest day is employer-designated.
- Counting the unpaid meal break as hours worked.
- Offsetting undertime on one day with overtime on another; Article 88 prohibits that.
- Using gross pay with unrelated reimbursements or non-wage benefits instead of the applicable basic or regular wage.
- Forgetting that night differential stacks on top of the applicable rate.
What this guide does not cover
This is a statutory-minimum estimate for rank-and-file private-sector employees. Managerial employees, field personnel, government employees, kasambahay, and some other groups have different or no coverage under the hours-of-work rules. Unworked holiday pay, absences, 13th month pay, tax, and government contributions are outside the scope of the calculator.
The Labor Code sets minimums. A collective bargaining agreement or company policy can provide higher rates, so check your contract or payroll handbook. See our sources page for the legal basis.