Night Shift Differential: How it is Computed

Employees whose work night shifts are entitled to receive night shift differential pay as provided for by the Philippine labor code. Night shift differential pay, often referred to as night differential, is calculated based on the hourly rate of the employee. The computation of night shift pay is determined by the number of hours worked during the night shift period.

The labor law in the Philippines specifies that night-shift differential shall be paid to employees whose work hours fall between ten o’clock in the evening and six o’clock in the morning. The hour of work performed within this timeframe is considered as part of the night shift, and employees are entitled to receive night differential pay for each hour worked during this period.

Employers are required to follow the rules and regulations set forth by the labor law when computing the night-shift differential. The rate per hour for the night-shift differential is usually a percentage of the employee’s regular pay rate. Typically, employees receive an additional ten percent of their hourly basic rate for each hour of work performed during the graveyard shift.

Employees in the government service are also entitled to receive night-shift differential pay in accordance with labor law ph. The computation of night shift differential pay is an important aspect of ensuring that employees are fairly compensated for working during non-traditional hours. By following the rules on night shift differential, employers can ensure that their employees are fairly compensated for their work during the evening and six o’clock.

An employee is entitled to extra pay for work rendered anytime between 10 p.m. and 6 a.m. Called the “night shift differential,” this is equivalent to 10% of the employee’s hourly pay, and is given for every hour worked between 10 p.m. and 6 a.m.

The employee is entitled to night shift differential whether or not the inclusive hours are part of their regular shift.

All employees are entitled to night shift differential except for the following:

  • government employees and employees of GOCCs (government owned and controlled corporations)
  • employees of retail or service companies regularly employing no more than five persons
  • domestic helpers and persons who are in another’s personal service
  • managerial employees
  • field employees or those unsupervised by the employer

If the work rendered by the employee during night shift hours is in excess of eight hours (overtime work), overtime premium should first be applied before the night shift differential is computed.

Computing for Night Shift Differential

Here are some examples showing how night shift differential is computed. The following are the bases for all scenarios:

Employee’s daily wage:  P500

Employee’s hourly wage: P500 / 8 hours = P62.50

1. Without overtime:

Employee’s work schedule: 8 p.m. to 4 a.m.

Number of hours worked between 10 p.m. and 6 a.m.: 6 hours

Night shift differential: Hourly wage x number of night shift hours worked x 10% = P62.50 x 6 hours x 0.10 = P37.50

Total take home pay: Daily wage + night shift differential = P500 + P37.5 = P537.50

2. With overtime:

Employee’s work schedule: 6 p.m. to 1 a.m.

Overtime: 1 a.m. to 4 a.m.

Number of hours worked between 10 p.m. and 6 a.m. (non-OT):  3 hours

Number of hours worked between 10 p.m. and 6 a.m. (OT): 3 hours

Number of hours worked in excess of eight hours: 3 hours

Overtime premium: 25% of hourly wage

The following is a breakdown of the take-home pay’s components:

Wage for overtime work:

  • Get the hourly overtime pay: Hourly wage x 25% = 62.5 x .25 = 78.125
  • Multiply the hourly overtime pay by the number of OT hours rendered: 78.125 x 3 = 234.375

Night differential:

For regular, non-OT hours: Get 10% of the regular hourly pay multiplied by the number of non-OT night shift hours worked: (62.5 x 3) x 0.10 = 18.75

For OT hours: Get 10% of the hourly overtime pay multiplied by the number of OT night shift hours worked: (78.125 x 3) x 0.10 = 23.475

Total night differential: 42.225

Total take-home pay:

Get the sum of the regular wage, overtime pay and night differential:

Regular wage: 62.5 x 8 hours = P500

Overtime pay = P234.375

Night differential = P42.225

Total take-home pay: P776.60

3. For work rendered on a regular holiday (100% premium)

Employee’s work schedule: 8 p.m. to 4 a.m.

Total number of hours worked: 8

Number of night shift hours worked: 6

  • Get the basic hourly wage including 100% regular holiday premium: hourly wage x 2 = 62.50 x 2 = 125
  • Get the daily wage with 100% holiday premium: hourly wage with premium x hours worked = 125 x 8 = 1,000
  • Get night differential: hourly wage with premium x number of night shift hours worked x 10% = 125 x 6 x .10 = 75
  • To get the total take-home pay, get the sum of the daily wage with premium and the night shift differential: 1,000 + 75 = P1,075

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