This article explains, in practical payroll terms, how to compute wages when employees work on rest days and special (non-working) holidays in the Philippines. It synthesizes the rules found in the Labor Code and long-standing DOLE pay rules, and turns them into clear formulas you can apply.
Key concepts and definitions
- Basic Daily Rate (BDR): The employee’s basic wage for an ordinary workday, excluding allowances and monetary benefits not integrated into the basic wage.
- Hourly Rate (HR): For computation, HR = BDR ÷ 8.
- Rest day: The scheduled 24-hour period after six consecutive days of work (or as otherwise scheduled by company policy/CBA) when an employee is not required to work.
- Special (non-working) holiday (“special day”): A day proclaimed by law or presidential issuance with the rule of “no work, no pay” (unless a more favorable practice or policy exists).
- Special working day: By specific proclamation or policy, some “special” days are treated like ordinary working days; no premium applies unless it also lands on the employee’s rest day (in which case rest-day premiums still apply).
- Overtime (OT): Hours beyond 8 in a day.
- Night Shift Differential (NSD): Additional 10% of the hourly rate on the day for work between 10:00 p.m. and 6:00 a.m.
Coverage: These rules apply to rank-and-file employees covered by the Labor Code’s hours-of-work and premium-pay provisions. Commonly excluded are managerial employees, those paid purely by results and not supervised as to time (certain field personnel), and others specifically exempted by law/regulation. Company policies or CBAs may grant better (higher) terms; those prevail.
The core pay rules (first 8 hours)
Use these multipliers against the BDR (or against HR for hourly computations):
A) Work on an ordinary rest day (not a special/regular holiday)
- Pay for first 8 hours: BDR × 130% (i.e., 1.30 × BDR)
B) Work on a special (non-working) holiday
- If unworked: No pay (unless a company policy/CBA/established practice says otherwise)
- If worked (first 8 hours): BDR × 130%
C) Work on a special (non-working) holiday that falls on the employee’s rest day
- Pay for first 8 hours: BDR × 150%
D) Special working day
- Treated like an ordinary working day (no premium).
- If it also falls on a rest day and is worked, apply rest day premiums in A).
Note: “Regular holidays” have different, higher rules (e.g., 200% if worked; 100% if unworked but qualified). This article focuses on special holidays and rest days.
Overtime (beyond 8 hours)
Overtime premiums are computed on the hourly rate for that specific day, then multiplied by 130% for each OT hour.
Determine the Hourly Rate on the Day (HR_day) first, using the correct day multiplier.
- Ordinary rest day or special day worked: HR_day = HR × 130%
- Special day on rest day: HR_day = HR × 150%
- Special working day (not a rest day): HR_day = HR × 100%
Each OT hour is then: HR_day × 130%
So, common OT effective rates per OT hour:
- OT on rest day (or on special day): HR × 130% × 130% = HR × 169%
- OT on special day + rest day: HR × 150% × 130% = HR × 195%
- OT on special working day (not rest day): HR × 100% × 130% = HR × 130%
Night Shift Differential (NSD)
- For work between 10:00 p.m. and 6:00 a.m., add 10% of the hourly rate on the day per night hour.
- If the night hour is also OT, compute OT first (the 130% on the day’s hourly rate), then add 10% of that OT hourly for NSD.
Examples of NSD add-ons per night hour:
- Night hour on rest day or special day (not OT): (HR × 130%) × 10%
- Night hour on special day + rest day (not OT): (HR × 150%) × 10%
- Night hour that is also OT on rest day or special day: (HR × 169%) × 10%
- Night hour that is also OT on special day + rest day: (HR × 195%) × 10%
Quick-reference matrix (first 8 hours)
| Situation | First 8 hours |
|---|---|
| Work on ordinary rest day | 130% of BDR |
| Work on special (non-working) day | 130% of BDR |
| Work on special (non-working) day falling on rest day | 150% of BDR |
| Special working day (not a rest day) | 100% of BDR (no premium) |
For OT hours, multiply the day’s hourly by 130% per OT hour (see OT section).
Worked examples
Assume:
- BDR = ₱800
- HR = ₱100 (₱800 ÷ 8)
1) Worked 8 hours on ordinary rest day
- Pay = 1.30 × ₱800 = ₱1,040
2) Worked 10 hours on ordinary rest day (2 hours OT)
- First 8 hours = ₱1,040
- Hourly on the day = HR_day = 1.30 × ₱100 = ₱130
- OT hourly = 1.30 × HR_day = 1.30 × ₱130 = ₱169
- 2 OT hours = 2 × ₱169 = ₱338
- Total = ₱1,378
3) Worked 8 hours on a special (non-working) day
- Pay = 1.30 × ₱800 = ₱1,040
4) Worked 10 hours on a special (non-working) day (2 hours OT)
- First 8 hours = ₱1,040
- Hourly on the day = ₱130
- OT hourly = 1.30 × ₱130 = ₱169
- 2 OT hours = ₱338
- Total = ₱1,378
5) Worked 10 hours on a special (non-working) day that falls on the rest day
- First 8 hours = 1.50 × ₱800 = ₱1,200
- Hourly on the day = 1.50 × ₱100 = ₱150
- OT hourly = 1.30 × ₱150 = ₱195
- 2 OT hours = ₱390
- Total = ₱1,590
6) Add NSD for 2 night hours (10 p.m.–12 a.m.) on the scenario in #5 (those 2 hours are OT and at night)
- OT hourly (from #5) = ₱195
- NSD per such hour = 10% × ₱195 = ₱19.50
- 2 NSD hours = ₱39.00
- Grand total = ₱1,590 + ₱39.00 = ₱1,629.00
Monthly-paid vs daily-paid employees
Daily-paid: Paid only for days actually worked and for regular holiday pay (if qualified). For special (non-working) days, “no work, no pay” applies unless a more favorable company practice/CBA grants payment.
Monthly-paid: The monthly rate customarily covers all days of the month (worked or unworked), including rest days, special days, and regular holidays. However, if monthly-paid employees actually work on a rest day/special day, the premium portions (30%, 50%, OT, NSD) are added on top of pay already covered by the monthly rate, per the company’s pay structuring and policy.
- Use your company’s approved conversion factors (e.g., for deriving the hourly rate from the monthly rate) consistently.
Piece-rate, commissions, and atypical schedules
- For piece-rate workers whose hours are controlled/supervised (thus covered by hours-of-work rules), compute the equivalent hourly or daily rate for premium purposes and apply the same multipliers.
- For compressed workweeks or non-standard daily hours, determine the regular daily/weekly equivalent and compute premiums on the hourly basis.
- Field personnel genuinely unsupervised as to time, and others exempted by law/regulation, generally do not receive premium pay.
Common compliance checkpoints (for employers and payroll)
- Written schedules showing designated rest days per employee/team.
- Time records that identify ordinary, rest-day, special-day, OT, and night hours distinctly.
- Separate premium lines on payslips (e.g., “Rest Day Premium,” “Special Day Premium,” “Rest Day Special Day Premium,” “OT (Rest Day),” “OT (Special Day),” “NSD”).
- Policies/CBA: If granting more favorable terms (e.g., paying unworked special days), keep them in writing and apply consistently.
- Rate derivations (monthly → daily → hourly) documented and consistently applied.
- Exemptions audit: Make sure only legitimately exempt roles (e.g., bona fide managers) are excluded from premium pay.
Frequently asked clarifications
Q: If an employee is absent before a special (non-working) day, do they lose special day pay? A: As a rule, unworked special days are not paid anyway, so presence/absence before the day generally does not matter—unless a company policy/CBA pays unworked special days subject to attendance conditions.
Q: Does “special working day” ever carry a premium? A: Not by itself. It is treated like an ordinary working day. However, if it falls on the employee’s rest day and they work, the rest-day premium (130%) applies.
Q: Do allowances count in computing premiums? A: Premiums are computed on the basic wage. If an allowance has been integrated into basic wage under policy/CBA, it forms part of the base. Otherwise, it’s excluded.
Q: How do we handle split shifts or cross-midnight work? A: Identify hours belonging to each calendar day and apply the correct day type (ordinary/rest/special) and NSD/OT status per hour.
Practical formulas (copy-ready)
Let BDR = basic daily rate; HR = BDR ÷ 8.
First 8 hours
- Rest day worked: Pay = 1.30 × BDR
- Special (non-working) day worked: Pay = 1.30 × BDR
- Special (non-working) day on rest day, worked: Pay = 1.50 × BDR
- Special working day (not rest day): Pay = 1.00 × BDR
Overtime (each OT hour)
- Compute HR_day for the situation: • Rest day or special day: HR_day = 1.30 × HR • Special day on rest day: HR_day = 1.50 × HR • Special working day (not rest day): HR_day = 1.00 × HR
- OT hourly = 1.30 × HR_day
Night Shift Differential (each night hour)
- NSD (non-OT) = 10% × HR_day
- NSD (OT night hour) = 10% × (OT hourly)
Bottom line
- Identify the day type (ordinary, rest day, special non-working, special working).
- Apply the correct multiplier for the first 8 hours.
- For hours beyond 8, compute OT as 130% of the hourly rate on that day.
- Add NSD (10%) for hours between 10 p.m.–6 a.m., based on the applicable (regular or OT) hourly rate for that day.
- Always check whether a more favorable company policy/CBA gives higher or additional benefits—those prevail.