How to Compute for Overtime Pay

The COLA shall not be included in the computation of overtime pay. The minimum overtime pay rates vary according to the day the overtime work is performed.

Overtime is calculated using below formula

Overtime Pay = Overtime Rate x number of hours OT work  

The computation for Overtime Rate is as follows:

Ordinary day Overtime 

Overtime Rate = Hourly Rate x 125%

Illustration: An employee's hourly rate is P 103.45. His ordinary day overtime rate is

Overtime Rate = P 103.45 x 1.25
Overtime Rate = P 129.31

Overtime Pay = P 129.31 x 4 hours OT
Overtime Pay = P 517.25

Rest Day (Sunday) and Special Holiday Overtime

Overtime Rate = Hourly Rate x 169%

Illustration: An employee's hourly rate is P 103.45. His rest day overtime rate is

Overtime Rate = P 103.45 x 1.69
Overtime Rate = P 174.83

Overtime Pay = P 103.45 x 4 hours OT
Overtime Pay  = P 699.32

Special Holiday and at the same time Rest Day Overtime

Overtime Rate = Hourly Rate x 195%

Illustration: An employee's hourly rate is P 103.45. His overtime rate is

Overtime Rate = P 103.45 x 1.95
Overtime Rate = P 201.73

Overtime Pay = P 201.73 x 4 hours OT
Overtime Pay = P 806.91

Regular Holiday Overtime

Overtime Rate = Hourly Rate x 260%

Illustration: An employee's hourly rate is P 103.45. His overtime rate is

Overtime Rate = P 103.45 x 2.60
Overtime Rate = P 268.97

Overtime Pay = P 268.97 x 4 hours OT
Overtime Pay = P 1,075.88

Regular Holiday and at the same time Rest Day Overtime

Overtime Rate = Hourly Rate x 338%

Illustration: An employee's hourly rate is P 103.45. His overtime rate is

Overtime Rate = P 103.45 x 3.38
Overtime Rate = P 349.66

Overtime Pay = P 349.66 x 4 hours OT
Overtime Pay = P 1,398.64

Regular Holiday and at the same time Rest Day Overtime

Overtime Rate = Hourly Rate x 338%

Illustration: An employee's hourly rate is P 103.45. His overtime rate is

Overtime Rate = P 103.45 x 3.38
Overtime Rate = P 349.66

Overtime Pay = P 349.66 x 4 hours OT
Overtime Pay = P 1,398.64

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How To Compute for Hourly Rate

Hourly rate is used in determining overtime pay and night differential. Hourly rate is computed using the following formula:

Hourly Rate = Daily rate / total working hours per day

For Monthly-Paid Earners

Example: Employee has a monthly rate of P 18,000.00 and is working Mondays to Fridays, 8 hours a day.

The employee's Daily rate can be determined using the formula here.

Daily Rate = (P 18,000.00 x 12) / 261 
Daily Rate = P 827.59

Hourly Rate = P 827.59 / 8 hours
Hourly Rate = P 103.45

For Daily-Paid Earners

Example: Employee has a daily rate of P 550.00 and is working 8 hours a day.

Hourly Rate = P 550.00 / 8 hours
Hourly Rate = P 68.75

Simple isn't it? Try to compute your hourly rate and share your thoughts in the comment box!