Few parts of Philippine payroll cause more confusion than premium pay. Regular holidays, special non-working days, rest days, overtime, and night-shift work each carry their own rate, and they can stack on top of one another. Compute them wrong and you either shortchange employees or quietly overpay. Here's how the main premiums work, with the rates and a few examples.
(These follow the Labor Code's standard rules; always confirm against the latest DOLE issuances and any more generous company policy.)
Start with the ordinary day
On a normal working day, an employee is simply paid their basic wage for the hours worked. Everything below is a premium on top of that baseline, triggered by when or under what condition the work happens. The key is to identify the day type first, then layer the applicable premiums.
Overtime pay
Work beyond eight hours in a day is overtime. On an ordinary working day, overtime is paid at an additional 25% of the hourly rate, so each overtime hour is worth 125% of the normal hourly wage. When overtime falls on a rest day, special day, or holiday, the overtime premium rises to an additional 30% of the applicable hourly rate for that day.
Night-shift differential
Any work performed between 10:00 PM and 6:00 AM earns a night-shift differential of at least 10% of the hourly rate for each hour worked in that window. It applies on top of whatever else is in play, so a night-shift hour that's also overtime on a holiday carries multiple premiums at once.
Rest day pay
An employee required to work on their scheduled rest day is entitled to an additional 30% of their daily rate, making the day worth 130%. Rest-day work that also runs into overtime then attracts the higher 30% overtime premium described above.
Special non-working days
Special non-working days follow a "no work, no pay" rule unless company policy says otherwise. If an employee does work, the first eight hours are paid at an additional 30%. That is, 130% of the daily rate. If the special day also falls on the employee's rest day, the rate rises to 150%.
Regular holidays
Regular holidays are the most generous. Even if the employee does not work, they are entitled to 100% of their daily wage (holiday pay), subject to the usual conditions. If they do work, the first eight hours are paid at 200% of the daily rate. And if a regular holiday also falls on the employee's rest day, working it pushes the rate to 260%.
A worked example
Take an employee earning ₱600 per day, or ₱75 per hour. On a regular holiday they work a full eight hours. Their pay for the day is 200% of ₱600 = ₱1,200. If two of those hours also fall after 10:00 PM, each of those hours additionally earns a 10% night differential on the already-elevated holiday hourly rate, a small but real amount that's easy to miss by hand. Now imagine doing that across dozens of employees, several day types, and a full cutoff, and you can see how manual computation goes wrong.
Why manual computation breaks down
The rates themselves aren't the hard part, the combinations are. A single shift can involve a holiday, a rest day, overtime, and night hours all at once, each with its own multiplier applied in the right order. Spreadsheets handle this poorly: one wrong reference and an entire column of premium pay is off. And because employees know holiday and overtime pay well, these errors are the ones most likely to be noticed and contested.
Let your payroll system stack the premiums
This is exactly the kind of layered logic software is built for. BeavHR reads each employee's actual attendance, identifies the day type, and applies overtime, rest-day, holiday, special-day, and night-differential rates automatically, in the correct order, so premium pay is computed consistently and left for HR to review before finalizing, instead of by hand with manual multipliers. If you'd like to see how it handles your trickiest shifts, book a demo and we'll run your own scenarios through it.
Quick reference: premium rates at a glance
Ordinary day overtime: +25% of the hourly rate (125%).
Night-shift differential: +10% of the hourly rate for work between 10:00 PM and 6:00 AM.
Rest day worked: 130% of the daily rate.
Special non-working day worked: 130% (first 8 hours); 150% if it also falls on a rest day.
Regular holiday, not worked: 100% of the daily wage.
Regular holiday worked: 200% (first 8 hours); 260% if it also falls on a rest day.
Overtime on a rest day/special day/holiday: +30% of the applicable hourly rate.
Keep this handy, but remember the real complexity is in combining them, which is precisely the part worth automating.
When holidays overlap, and other special cases
Double holidays
Occasionally two regular holidays fall on the same date. A "double holiday" is more generous than a single holiday, the premium is higher still, and higher again if it also lands on the employee's rest day. Because these dates are rare and the math is easy to get wrong, confirm the current DOLE guidance for the specific date before running payroll.
Compressed workweeks and flexible arrangements
Under a compressed workweek or other alternative work arrangement, daily hours may exceed eight without triggering daily overtime, within the limits DOLE allows and subject to employee agreement. The premium rules still apply to holidays, rest days, and night hours, the arrangement changes the overtime threshold, not the holiday multipliers.
A note on who is covered
Managerial employees and certain other categories are generally not entitled to overtime and holiday premium pay, so apply these rules to your rank-and-file workforce.
Frequently asked questions
Is holiday pay mandatory in the Philippines?
Yes. On a regular holiday, covered rank-and-file employees are entitled to holiday pay even if they do not work, subject to the Labor Code's conditions (for example, being present or on paid leave on the workday immediately before the holiday). Special non-working days follow a "no work, no pay" rule unless a company policy or CBA provides otherwise.
Who is exempt from overtime and holiday premium pay?
Managerial employees, and certain other categories such as field personnel and some family members of the employer, are generally not entitled to overtime, premium, and holiday pay under the Labor Code. Rank-and-file employees are covered.
Do night differential and overtime stack with holiday pay?
Yes. Premiums layer on top of one another. An hour that is overtime, worked on a regular holiday, and falls after 10:00 PM can carry the holiday rate, the overtime premium, and the 10% night differential at the same time.
What happens when two regular holidays fall on the same day?
When two regular holidays coincide (a "double holiday"), the pay is more generous than for a single holiday. Because these dates are rare and computation-heavy, confirm the current DOLE guidance for the specific date before running payroll.
Related reading
- The Complete Guide to Philippine Payroll Compliance
- How to Compute 13th Month Pay in the Philippines
- The Employer's Payroll Calendar
Disclaimer: This article is general information, not legal or tax advice, and Philippine rules and rates change over time. Always confirm the current requirements with the official agencies, DOLE, BIR, SSS, PhilHealth, and Pag-IBIG, or your legal counsel before acting. Last reviewed: July 2026.