1) Why this issue matters

In the Philippines, many statutory wage-and-benefit computations are anchored on a daily rate (because minimum wage is typically set per day through regional wage orders). Yet many employees are paid a fixed monthly salary. That mismatch creates the recurring question:

Do we divide the monthly salary by 22 or by 26 to get the “daily rate”?

The short legal reality is: there is no single universal divisor. The correct divisor depends on (a) the employee’s work schedule and (b) what the monthly salary is understood to cover (working days only, or all calendar days including rest days and holidays). Using the wrong divisor can lead to underpayment, illegal deductions, or incorrect premium pay.

This article explains the legal framework, the practical payroll conventions, and how to choose the correct method in a way that stays defensible in Philippine labor disputes.

2) Core legal framework (Philippine context)

Daily-rate conversion sits at the intersection of these statutory concepts:

A. “Wage” and “basic salary”

Philippine labor law distinguishes between:

Basic wage/basic salary (the rate for normal working hours), and
Wage-related monetary benefits (holiday pay, overtime pay, night shift differential, 13th month pay, etc.), some of which have different computation rules and exclusions (e.g., many “allowances” may be excluded from certain benefits depending on their nature and practice).

B. Work schedule and hours of work

Premium pay and deductions are deeply tied to:

Normal working days (e.g., Monday–Friday vs Monday–Saturday),
Rest days (typically Sunday or another day fixed by the employer),
Regular holidays and special non-working days (declared by law/proclamation),
Hours worked (usually 8 hours/day as the standard for computations unless a different normal workday is validly adopted).

C. Minimum wage compliance

Because minimum wages are usually expressed as daily minimum wages, an employer paying a monthly salary must ensure that the employee’s equivalent daily rate is not below the applicable daily minimum wage when measured correctly.

D. Statutory monetary benefits

Daily rate affects computations such as:

Holiday pay (regular holiday pay and premiums when worked),
Rest day premiums,
Overtime pay (which uses the hourly rate derived from the daily rate),
Night shift differential,
Leave conversions/commutations (e.g., Service Incentive Leave pay-out),
Wage deductions for absences/tardiness (where the divisor is commonly contested).

3) The key concept: “Divisor” depends on what the salary covers

The central question is not “22 vs 26.”

It is:

How many days is the employee being paid for, as a matter of contract, policy, and lawful practice?

There are two common models:

Model 1: Monthly salary covers working days only

Some workplaces treat the monthly salary as essentially a “bundle” of paid working days (and they deduct proportionately for absences using working-day divisors like 22 or 26).

If the employee works 6 days/week (e.g., Mon–Sat), payroll often uses 26 as the average paid working days per month.
If the employee works 5 days/week (e.g., Mon–Fri), payroll often uses 22 as the average paid working days per month (more precisely ~21.67).

This model is common in private sector payroll administration, but it must be implemented carefully so it does not defeat statutory entitlements (especially holiday pay and premium pay rules).

Model 2: Monthly salary covers all calendar days (including rest days and holidays)

This approach treats the employee as being paid a monthly amount that already includes payment for:

Rest days, and
Holidays (at least the “unworked but paid” portion for regular holidays, depending on classification and rules).

Under this model, the divisor is not 22 or 26, but rather a calendar-based divisor such as:

365/12 ≈ 30.4167 days per month, or
An annual-day conversion method consistent with what days are paid.

This model is conceptually aligned with the idea that a monthly-paid employee receives a stable monthly amount regardless of the number of working days in a particular month.

Important: Many disputes arise because employers say the salary is “monthly,” but treat it like working-days-only when deducting absences—then treat it like calendar-days-included when it benefits payroll costs. Consistency matters.

4) Where “26” and “22” come from (and what they really mean)

A. The “26 days” divisor

A 6-day workweek yields about:

6 days/week × 52 weeks/year = 312 working days/year
312 ÷ 12 = 26 working days/month (average)

So 26 is an average working-days-per-month factor for a 6-day schedule.

B. The “22 days” divisor

A 5-day workweek yields about:

5 days/week × 52 weeks/year = 260 working days/year
260 ÷ 12 = 21.6667 working days/month, often rounded to 22

So 22 is an average working-days-per-month factor for a 5-day schedule.

C. These are averages, not legal commandments

They are payroll conventions used for:

Daily-equivalent rates,
Absence/tardiness deductions,
Some leave conversions,
Costing and budgeting.

But they are not automatically correct for premium pay, holiday pay, or minimum wage equivalency unless they match the true paid-day structure of the compensation.

5) When using 22 or 26 is usually defensible

Scenario 1: Deductions for absences of a monthly-salaried employee (working-days approach)

Using 22 or 26 is most commonly encountered and defended in disputes involving deductions:

If the employee is scheduled 5 days/week, employers often deduct absences as: Daily equivalent = Monthly salary ÷ 22
If the employee is scheduled 6 days/week, employers often deduct absences as: Daily equivalent = Monthly salary ÷ 26

Legal risk to watch: If the divisor inflates the daily equivalent so much that deductions become excessive or inconsistent with the actual salary structure, it can be challenged as an unfair or improper deduction—especially if the employee’s salary is arguably meant to cover more than working days.

Scenario 2: Converting monthly salary to a “daily equivalent” for internal payroll

For internal payroll processing, 22/26 can be acceptable if:

The employer clearly defines the schedule,
Applies the divisor consistently,
Ensures compliance with minimum wage and premium pay rules,
And does not use the divisor to reduce statutory benefits.

6) When 22 or 26 can be wrong (or dangerous)

A. Minimum wage equivalency checks

Minimum wage is daily. If you convert monthly pay to daily using an inappropriate divisor, you can accidentally “prove” compliance while actually risking underpayment (or vice versa).

A safer compliance approach is:

Convert monthly salary into an annual salary (monthly × 12),
Divide by the actual number of paid days in a year consistent with the pay structure,
Compare the resulting daily equivalent with the applicable minimum wage.

B. Computing premiums (holiday/rest day pay) for monthly-paid employees

Premium pay rules generally treat:

Regular holiday pay as payable even if unworked (subject to rules), and
Work performed on holidays/rest days as premium-bearing.

For a monthly-paid employee, the “base” holiday pay may already be included in the monthly salary, so the computation often focuses on the additional premium when the day is worked.

If you use a working-days-only divisor (like 22 or 26) in situations where the monthly salary is meant to cover calendar days, you might:

Overstate or understate the hourly rate,
Miscompute overtime and holiday premiums,
Create inconsistency that becomes a litigation issue.

C. Months with unusual working-day counts

February and months with many holidays expose the weakness of fixed divisors:

A fixed 22 or 26 ignores the actual count of working days in a specific month. That’s fine only if your policy is truly based on an average working-day model and consistently applied.

7) Practical guide: choosing the correct divisor (Philippine workplace reality)

Step 1: Identify the employee’s workweek pattern

5-day schedule (Mon–Fri) → 22 is the common working-days divisor
6-day schedule (Mon–Sat) → 26 is the common working-days divisor

Step 2: Determine what the salary is understood to cover

Ask: Is the monthly salary meant to pay the employee for:

Working days only, or
All days of the month (including rest days/holidays as part of monthly pay stability)?

Clues:

Does the employee receive the same salary even if a month has fewer working days?
How are absences deducted in practice?
Do company policies/CBA define “monthly-paid” treatment?
Are holiday pays itemized separately for monthly-paid staff, or assumed included?

Step 3: Apply the divisor consistently with that model

If your model is working-days-only averaging:

5-day schedule: Monthly ÷ 22 = daily equivalent
6-day schedule: Monthly ÷ 26 = daily equivalent

If your model is calendar-days inclusive:

Use a calendar-based divisor (e.g., monthly ÷ 30.4167 as a monthly-to-daily equivalent), or a consistent annual conversion method aligned with paid days.

Step 4: For hourly computations, align with normal hours

Hourly rate is usually daily rate ÷ 8 (if 8 hours/day is the normal schedule). If your normal day is different, computations must reflect the valid normal hours.

8) Worked examples (to show the impact)

Assume a monthly salary of ₱26,000.

A. Daily equivalent using 26

₱26,000 ÷ 26 = ₱1,000/day
Hourly (8 hours): ₱1,000 ÷ 8 = ₱125/hour

B. Daily equivalent using 22

₱26,000 ÷ 22 = ₱1,181.82/day
Hourly (8 hours): ₱1,181.82 ÷ 8 = ₱147.73/hour

Observation: A smaller divisor (22) produces a higher daily/hourly rate. That means:

Higher deductions per day absent, and
Higher computed overtime/holiday premiums if you use that derived rate for premiums.

This is why the divisor choice is contentious: it changes money outcomes.

9) Common dispute points in labor complaints

Issue 1: “You deducted too much for one day of absence.”

Employees often challenge deductions when:

The employer used 22 but the employee works 6 days/week (or vice versa), or
The monthly salary was treated as paying “all days,” yet deductions were computed as if it paid “working days only.”

Issue 2: “Your overtime and holiday premium computations are inconsistent.”

If the employer uses:

One divisor for deductions,
Another divisor for overtime,
Another divisor for holiday premiums, …that inconsistency is fertile ground for claims.

Issue 3: “My pay falls below minimum wage when computed properly.”

If the employer uses an overly generous divisor to “pass” minimum wage equivalency checks, the employee may allege underpayment based on a more accurate paid-day structure.

10) Best-practice compliance checklist (private sector)

Document the work schedule (5-day or 6-day; normal daily hours).
Define pay coverage in writing:
- Is the monthly salary for working days only (averaged), or does it cover all days?
Use a consistent divisor across:
- Absence deductions,
- Leave conversion/commutation,
- Hourly rate derivation for overtime/night differential,
- Holiday/rest day premium computations (with correct “additional premium” logic for monthly-paid employees).
Ensure minimum wage compliance using a conversion method that matches your pay structure.
Align payroll practice with statutory benefits, especially:
- Regular holiday pay,
- Premium pay rules for work on holidays/rest days,
- 13th month pay rules (based on basic salary actually earned within the year, with proper inclusions/exclusions).

11) FAQs

Is 26 “required by law”?

No. 26 is a common payroll divisor for a 6-day schedule, derived from average working days per month. It becomes defensible when it matches the work schedule and the pay structure.

Is 22 “required by law”?

No. 22 is a common payroll divisor for a 5-day schedule (rounded from ~21.67). It is defensible when it matches the schedule and the salary model.

Can an employer use the actual working days of the month instead of 22/26?

Yes, some do—especially for daily-paid arrangements or when policies clearly support actual-day counting. But if you shift between “actual days” and “average days” selectively, you increase legal risk.

If using 22 results in higher overtime pay, is that automatically okay?

Paying more is generally not a violation. The problem is inconsistency and whether the method causes underpayment elsewhere (or excessive deductions). Also, incorrect premiums can create ripple errors (e.g., miscomputed holiday pay, leave conversions).

Does 13th month pay use 22 or 26?

Typically, no. 13th month pay is based on basic salary actually earned during the calendar year (subject to established inclusion/exclusion rules). Divisors matter only indirectly (e.g., when determining what “earned” basic salary is after absences).

12) Takeaway

22 and 26 are not magic legal numbers. They’re payroll conventions reflecting 5-day vs 6-day workweeks on an average-month basis.
The legally safer approach is to ground the divisor in:
1. the employee’s actual schedule, and
2. what the salary is intended to cover (working days only vs all days), then apply it consistently and in a way that does not reduce statutory benefits or obscure minimum wage compliance.

If you want, paste your company’s pay assumptions (e.g., 5-day/6-day schedule, whether monthly pay is meant to cover rest days/holidays, how absences are deducted), and I’ll map a consistent set of formulas you can adopt across deductions, overtime, holiday pay, and leave conversions.