Overtime & Night Differential
Pay 2026

Three Premiums, One Rule: They Multiply

Overtime pay, rest day pay, holiday pay, and night shift differential are separate premiums that can apply at the same time — for example, working overtime on a rest day at night. When they overlap, Philippine payroll practice multiplies the rates together rather than adding the percentages.

Night Shift Differential

Employees who work between 10:00 PM and 6:00 AM are entitled to an additional 10% of the regular hourly rate for each covered hour. The formula: Night differential = Hourly rate × 10% × number of night hours. This stacks multiplicatively with overtime or holiday premiums rather than being added as a flat peso amount.

Worked Example

An employee with an hourly rate of ₱100 who works 2 hours of overtime between 10 PM and midnight on an ordinary working day earns: ₱100 × 125% × 110% = ₱137.50 per hour, or ₱275 for the 2 hours — on top of their regular 8-hour daily wage.

Frequently Asked Questions

What is the overtime pay rate on an ordinary working day?

Overtime on an ordinary working day is paid at 125% of the employee's regular hourly rate for each hour worked beyond 8 hours.

How is night shift differential computed?

Night shift differential is an additional 10% of the regular hourly rate for every hour worked between 10:00 PM and 6:00 AM. It stacks multiplicatively with other premiums such as overtime or holiday pay rather than being added on top separately.

Do overtime and night differential premiums add together or multiply?

They multiply. For example, an overtime hour worked during the night differential window on an ordinary day is computed as hourly rate × 125% × 110%, not hourly rate × (125% + 10%).