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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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!

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There are several methods on how to determine the daily rate for monthly-paid employees. This varies depending on the number of working days of an employee.

Assuming an employee has a monthly income of P 20,000.00. His Daily Rate will be:

1. If he is required to work everyday, including Sundays or rest days, special days and regular holidays

Daily Rate = (Monthly Income x 12 months) / factor 393.50 days/year

where factor 393.50 days/year  = A + B + C + D

where A =  298 ordinary working days (365 days/year -12 regular holiday - 52 rest days - 3 special holidays)

         B =  24 regular holidays (12 regular holidays x 200%)

         C =  67.6 rest days (52 rest days x 130%)

         D =  3.90 special days (3 special days x 130%)

Daily Rate = (P 20,000.00 x 12) / 393.50

Daily Rate =  P 609.91

2. If he is not required to work and are not considered paid on Sundays or rest days, special days and regular holidays. This simply means he is working Mondays to Saturdays.

Daily Rate = (Monthly Income x 12 months) / factor 313 days/year

where factor 313 days/year = A + B + C

where A =  298 ordinary working days (365 days/year -12 regular holiday - 52 rest days - 3 special holidays)

          B =  12 regular holidays

          D =  3 special days (if considered paid); if this is actually worked, this is equivalent to 3.9 days  (3 special days x 130%)

Daily Rate = (P 20,000.00 x 12) / 313

Daily Rate =  P 766.77

Factor 310 may be used instead of 313 if the 3 special holidays are not considered paid

3. If he is not required to work and are not considered paid on Saturdays and Sundays or rest days, special days and regular holidays. This simply means he is working Mondays to Fridays.

Daily Rate = (Monthly Income x 12 months) / factor 261 days/year 

where factor 261 days/year  = A + B + C

where A =  246 ordinary working days (365 days/year -12 regular holiday - 52 Saturdays - 52 rest days - 3 special holidays)

         B =  12 regular holidays 

         C =  3 special days (if considered paid); if this is actually worked, this is equivalent to 3.9 days  (3 special days x 130%)

Daily Rate = (P 20,000.00 x 12) / 261

Daily Rate =  P 919.54

Factor 258 may be used instead of 261 if the 3 special holidays are not considered paid

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