Understanding Night Shift Differential
What is Night Shift Differential?
Night shift differential is an additional pay given to employees who work during the
night shift, typically from 10:00 PM to 6:00 AM of the following day. This is to
compensate for the inconvenience and potential health risks associated with working
during non-traditional hours.
How is it Computed?
The basic computation for night shift differential is straightforward:
● 10% of the employee's regular wage is added to the regular hourly rate for
each hour worked between 10:00 PM and 6:00 AM.
Breakdown of the Example
Base Calculation:
● Regular hourly rate: PHP 400
Additional Calculation for Night Shift:
● 10% of the regular hourly rate: PHP 400 * 10% = PHP 40
Total Hourly Pay for Night Shift:
● Regular hourly rate + night shift differential = PHP 400 + PHP 40 = PHP 440
Additional Consideration: Overtime on Night Shift The example provided also
includes a calculation for overtime pay on a rest day, special day, or regular holiday,
which is 130% of the regular hourly rate. However, it seems there's a missing
calculation for the night shift differential on top of this overtime rate.
To compute the correct total pay rate for overtime on a night shift, we should follow
these steps:
1. Calculate the overtime pay:
○ Regular hourly rate * 130% = PHP 400 * 1.30 = PHP 520
2. Calculate the night shift differential on the overtime rate:
○ Overtime rate * 10% = PHP 520 * 10% = PHP 52
3. Calculate the total pay rate:
○ Overtime rate + night shift differential = PHP 520 + PHP 52 = PHP 572
Correct Computation
Therefore, the correct total pay rate for an employee working overtime on a night
shift, special day, or regular holiday with a regular hourly rate of PHP 400 is PHP
572.
Note:
● This calculation assumes that the employee is working the entire night shift
(10:00 PM to 6:00 AM). If the employee only works part of the night shift, the
night shift differential should be calculated proportionally.
● The 10% night shift differential is the minimum required by law. Some
companies may offer a higher percentage as a benefit.
Let's Breakdown the Overtime Pay Calculation
Understanding the Problem:
● Overtime work is performed on an ordinary day.
● Basic hourly rate is PHP 400 / 8 hours = PHP 50/hour.
● Overtime pay is 25% of the basic hourly rate.
Calculation:
● Basic hourly rate: PHP 50
● Overtime rate: PHP 50 * 25% = PHP 12.50
● Total hourly rate for overtime: PHP 50 + PHP 12.50 = PHP 62.50
For 3 hours of overtime:
● Total overtime pay = PHP 62.50/hour * 3 hours = PHP 187.50
Your calculation is correct.
Key Points to Remember:
● Overtime pay is an additional compensation for work done beyond the regular
eight hours.
● The rate for overtime pay varies depending on the day (ordinary day, rest day,
holiday).
● Always ensure accurate computation of basic hourly rate before calculating
overtime pay.
Understanding the Overtime Pay Calculation
The Breakdown
The provided information outlines the calculation of overtime pay for work performed
on a rest day or special day, as mandated by Article 93(A) of the Philippine Labor
Code.
Key Points:
● Overtime pay for work done on a rest day or special day is 130% of the basic
hourly rate.
● This 130% comprises two parts:
○ 100% is the basic hourly rate.
○ 30% is the additional compensation as per Article 93(A).
The Calculation Error
The provided calculation is incorrect. Here's the breakdown of the error:
● Incorrect: The additional 30% is calculated as 400 * 0.3 = 120 PHP.
● Correct: The overtime pay rate should be calculated as 400 * 1.3 = 520 PHP.
Correct Calculation
Given:
● Basic hourly rate: 400 PHP
Calculation:
● Overtime pay rate = Basic hourly rate * 1.30
● Overtime pay rate = 400 PHP * 1.30
● Overtime pay rate = 520 PHP
Conclusion
The overtime pay rate for work performed on a rest day or special day is 520 PHP
per hour.
Note: This calculation only determines the overtime pay rate. The total overtime pay
will depend on the number of overtime hours worked.
