How to compute for Overtime Pay


There will be instances where employees need to work some extra hours whether they’d be asked for it or they just have the luxury of time to do so. In our country, overtime pay depends on the rate of a certain employee. Meaning, the extra hours worked is not the only factor in computing it. In this article, we will be teaching you how you can compute for your overtime pay in order for you to have a record of it and for you to be assured that you will be paid right.

It is important to keep in mind that computation for overtime pay varies from company to company; the computation we will be teaching you is just the basic one and in this case this one is the computation that most companies follow.

Is everyone eligible for this pay?

Yes, all employees have their rights to work in extra hours, of course, to get better pays although some companies implement certain rules in overtime pay. One good example is that employees need to ask permission from their supervisor for overtime pay; they would have to plot the dates when they would want to work extra hours.

Read: How to compute SSS monthly pension

Some companies however, oblige their employees to render overtime. Well if you think that this is illegal, think again. There are certain instances where a company may ask their employees for overtime and those are exemptions from the law book of employment.

How can I have overtime pay?

For starters, you can actually have your overtime pay by just talking to your employer that you want to work extra hours for the day or in whatever day that you wish. But some companies have their schedules system-generated so, what they require their employees is to inform them when they wish to have their overtime 1-2 weeks prior to the date that they want.

Read: How to discipline Philippine Employees 

Take note that this system varies from company to company and to profession. Some professions do not actually have overtime pay like being a doctor, being a lawyer, and other professions. If you want to be sure, inquire about it to your Human Resources team in your company.

So how do you compute for overtime pay?

Let’s say that Worker A has an hourly rate of P60. In order to compute for the overtime rate, you need to do abide to this formula:

(Hourly Rate x 1.25%) = (P60 x 1.25%= P75)

That is how you compute for the normal day overtime rate. But there are other forms of overtime rate if you could think of it. We have the Rest Day overtime, The Holiday overtime, and the Rest Day + Holiday overtime.

For the Rest Day overtime, the formula is:

(Hourly Rate x 1.69%) = (P60 x 1.69% = P101.4)

As you can see, going on overtime in your rest day can lead you to staggering numbers that can change your life.

For the holiday overtimes, we have actually two, we have the:

  • Special non-working holiday
  • Regular holiday

The special non-working holiday is the type of holiday that is not favored by all employees. Yes, it gives us extra but it is less than what we can get in a regular holiday. To compute for the hourly rate, we have:

(Hourly Rate x 1.69%) = (P60 x 1.69% = 101.4)

It is actually the same rate as you have on your rest day. It’s not much but it’s something, right?

The regular holiday however, can blow your mind into little fragments of fortune. To compute for the overtime rate, we have to follow this formula:

(Hourly Rate x 2.260%) = (P60 x 2.60% = P156)

See the difference? Now you understand what I was talking about when I said that it does not give what the special holiday can. It almost doubled what you get for every hour on normal days so you better think about going on overtime during a regular holiday.

We also have what we call double holiday (special non-working and regular at the same time) and to compute for this, you need to follow this formula:

(Hourly Rate x 3.90%) = (P60 x 3.90% = P234)

This probably is the best type of overtime pay if you are not to work during your rest day. This can happen a few times in a year but hey, it will all be worth it. Imagine, you just tripled what you get in a normal day.

Working during your rest day is already a lot of extra income for you but working on a rest day during a holiday with an overtime pay can leave you crying because you can actually change the constant numbers in your payslip.

Working overtime during your rest day on a special holiday will give you an extra 1.95%. So let’s say:

(Hourly Rate x 1.95%) = (P60 x 1.95% = P117)

Not bad for an extra, right? In estimation, it doubled what you are having in your normal salary during a normal day.

For breaking your bones in your rest day during a regular holiday and getting overtime, you might want to clear your eyes and rethink about life because you will be surprised.

(Hourly Rate x 3.38%) = (P60 x 3.38% = P202.8)

It actually tripled what you get in a normal day. Wait until you know how much you can get during a double holiday rest day overtime.

(Hourly Rate x 5.07%) = (P60 x 5.07% = P304.2)

Now with this one, I am just speechless.

As you can see, working those extra hours can really pay off not just during normal days but during special days and occasions as well. Remember to have a balanced life work life balance as they say but do your best in getting the pay that you know you strongly deserve.

Now that is what we have for you about overtime pay, if you think that being inside the office for an extra hour or two would not make that kind of change in your payslip, recheck what you know and read this article because you may never know what can hit you.

Read Also: How to compute separation pay in the Philippines

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