Night-Shift Differential Pay in the Philippines Explained 2024
Working at night time carries a greater risk to the overall well-being of an individual compared to the one that is working in the daytime.
One of the responsibilities of a company is to ensure that everyone working in night shift is compensated correctly and provided other benefits.
In this article, we will discuss what is night shift differential and how to compute it accurately.
What is the Night Shift Differential Pay?
In the Philippines' work environment, the night shift differential pay is the compensation given by the employer to its employees for working on the specified night time range. It is required in payroll and mandated by the law. Night shift differential is often referred to as Graveyard shift pay or night shift pay.
In most of the industries in the Philippines, night-time differential pay starts from 10:00 PM to 6:00 AM.
According to the Labor Law, the compensation of the employee for the hours worked between the night hours should be equal to or greater than 10% of the employee's hourly pay. For the government agencies, it is mandated at 20%.
Computing Night Shift Differential Pay
The computation of the night shift differential pay is shown below. We will provide a comprehensive guide on how to compute the night differential with different scenarios.
But first, we must know the hourly rate of the employee to be able to calculate the graveyard shift pay.
Here in our example, Employee A has an hourly rate of Php 87.00 pesos per hour.
Since the night shift differential differs based on the employer’s policy, let’s keep it to the labor law minimum, which is 10%.
Scenario 1: Without Overtime Pay
Hourly rate = Php 87
Night shift differential = 110%
Employee nightshift pay
= Hourly rate x 110%
= P87 x 110%
= P87 x 1.1
= P95.7 / hour
Scenario 2: With Overtime Pay
Hourly rate = Php 87
Night shift differential rate = 110%
Overtime pay rate = 125%
Employee nightshift pay
= Hourly rate x 125% x 110%
= P87 x 125% x 110%
= P87 x 1.25 x 1.1
= P119.625 / hour
Scenario 3: Work Rendered on Rest Day
Hourly rate = Php 87
Night Shift Differential Rate = 110%
Rest Day Pay Rate = 130%
Employee nightshift pay
= Hourly rate x 130% x 110%
= P87 x 130% x 110%
= P87 x 1.3 x 1.1
= P124.41
Scenario 4: Work Rendered on Special Non-working Holiday
Hourly rate = Php 87
Night Shift Differential Rate = 110%
Special Non working Holiday = 130%
Employee nightshift pay
= Hourly rate x 130% x 110%
= P87 x 130% x 110%
= P87 x 1.3 x 1.1
= P124.41
Scenario 5: Work Rendered on Special Non-working Holiday and Rest Day
Hourly rate = Php 87
Night Shift Differential Rate = 110%
Special Non working Holiday & Rest Day rate = 150%
Employee nightshift pay
= Hourly rate x 150% x 110%
= P87 x 150% x 110%
= P87 x 1.5 x 1.1
= P143.55
Scenario 6: Work Rendered on Regular Holiday
Hourly rate = Php 87
Night Shift Differential Rate = 110%
Regular Holiday rate = 200%
Employee nightshift pay
= Hourly rate x 200% x 110%
= P87 x 200% x 110%
= P87 x 2 x 1.1
= P191.4
Scenario 7: Work Rendered on Regular Holiday and Rest day
Hourly rate = Php 87
Night Shift Differential Rate = 110%
Regular Holiday rate = 260%
Employee nightshift pay
= Hourly rate x 260% x 110%
= P87 x 260% x 110%
= P87 x 2.6 x 1.1
= P248.82
Scenario 8: Double Holiday Night Differential Pay
Hourly rate = Php 87
Night Shift Differential Rate = 110%
Regular Holiday rate = 330%
Employee nightshift pay
= Hourly rate x 330% x 110%
= P87 x 330% x 110%
= P87 x 3.3 x 1.1
= P315.81
Scenario 9: Double Holiday and Rest day
Hourly rate = Php 87
Night Shift Differential Rate = 110%
Regular Holiday rate = 390%
Employee nightshift pay
= Hourly rate x 390% x 110%
= P87 x 390% x 110%
= P87 x 3.9 x 1.1
= P373.23
Wrapping Up Different Night Shift Differential Pay
Computing night differential doesn’t have to be complicated at all. With our guide above, we hope that it helps you clear the confusion about the pay rates for every scenario. We also know that you have learned different pay such as regular night shift, overtime night shift, regular & special holidays, and more.
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