BUSINESS MATHEMATICS

QTR 2 -WK 3

OVERTIME PAY

Learning Competencies:
The learners:
1. Identify the variables needed in the computation of the overtime
2. Compute the overtime

Overtime is the amount of time a person works beyond working hours.

1.  HOW MUCH IS THE MINIMUM WAGE IN METRO MANILA?

       For the summary of current regional daily minimum wage rates, log on at http://nwpc.dole.gov.ph/.

2. WHAT IS THE NORMAL HOURS OF WORK IN A DAY?

     The normal hours of work in a day is 8.2

3. WHAT IS HOLIDAY PAY?

     Holiday pay refers to payment of the regular daily wage for any unworked regular holiday.

 4. WHAT IS THE CONDITION SO THAT AN EMPLOYEE WILL BE ENTITLED TO HOLIDAY

PAY?

     He/She should be present on the workday immediately preceding the regular holiday; or
     He/She should be on leave of absence with pay on the day immediately preceding the regular holiday.
 

5.  HOW CAN AN EMPLOYEE BE ENTITLED TO THE TWO (2) SUCCESSIVE REGULAR
HOLIDAYS?

    An employee can be entitled to two (2) successive regular holidays, like Holy Thursday and Good Friday if
he/she works or is on leave of absence with pay on the day immediately preceding the first holiday.
 

6. HOW MUCH IS THE HOLIDAY PAY OF AN EMPLOYEE?

      For any unworked regular holiday, 100% of the employee’s daily wage rate (Basic pay + COLA).
      For work performed on a regular holiday, plus 100% or a total of 200% of the employee’s daily wage rate
(Basic pay + COLA).

7. WHAT IS PREMIUM PAY?

       Premium pay refers to the additional payment for work within 8 hours on rest days or special days. For list
of special days, log in at dole.gov.ph/pages/view/9 

8. HOW MUCH IS THE PREMIUM PAY OF AN EMPLOYEE?

       Plus 30% of the daily basic rate or a total of 130% for work performed on rest day or special day.

       Plus 50% of the daily basic rate or a total of 150% for work performed on special day falling on the
employee’s rest day.  
       Plus 30% of the daily basic rate or a total of 260% for work performed on a regular holiday falling on the
employee’s rest day.

9. WHAT IS OVERTIME PAY?

       Overtime pay refers to the additional pay for work performed in excess of 8 hours a day.

10. HOW MUCH IS THE OT PAY OF AN EMPLOYEE?

       Plus 25% of the hourly rate for work performed in excess of 8 hours on ordinary day.

        Plus 30% of the hourly rate for work performed in excess of 8 hours on rest day, special day or regular
holiday.

11. WHAT IS NIGHT SHIFT DIFFERENTIAL?

        Night shift differential refers to the additional compensation for work performed from 10:00 O’clock in the
evening to 6:00 O’clock in the morning.

12. HOW MUCH IS THE NIGHT DIFFERENTIAL OF AN EMPLOYEE?

        Plus 10% of the hourly rate for work between 10:00 O’clock in the evening and 6:00 O’clock in the
morning.

 
Example
In regular day (A) , the overtime rate ( r ) of an employee with a regular hourly rate of (h) is at least 1.25h. If A
is a special day or holiday, then r = 1.3h
A night differential refers to an additional amount n added to the hourly rate h. The amount n is only
added if an employee works anytime from 10:00 P.M. to 6:00 A.M. . The amount n is equal to 1. 1h, as stated in
the Labor Code of the Philippines.
We derive now a formula for the previous problem. We let
T= be the total daily earnings, and
R = be the daily rate ( equivalent to 8 hours), and
H be the number of worked hours.

T=R + R x R/8 x (H-8)

=8 + 1.25H- *(1.25) x R
8
= 1.25H- 2 X R
8
Since R is the daily rate, R/8 refers to the hourly date.
Recall the previous problem. We can find T as
Given: R= 424 H= =10
T= 1.25H-2 x R = 1.25 (10)-2 x 424 = 556.50
8 8
How many hours are allowed for overtime work?
Employees can render up to eight (8) hours of overtime work. Some employees, however, are exempt to this
rule. The list includes managers, field personnel, domestic helpers, workers who are hired for personal service
of another, members of the employer's family who depend on employees for support, and workers whose
compensation is results-based.

Can an employee demand overtime work from the employer?

The employee cannot urge or oblige the employer to let him or her to render overtime work if it is not required
by the circumstance or there is no extra work to be done.

Can employers/business owners require their employees to render overtime work?

The law does not encourage employers/business owners to ask their employees to do overtime work. Overtime
work may cause unnecessary stress to workers, making it difficult for them to achieve and maintain work-life
balance. Under certain conditions and circumstances, however, employers may require overtime work:

 If the country is at war or declared to be under national or local emergency

 If overtime work can help save lives or properties in face of danger to public safety due to emergencies
caused by fire, natural disasters, or serious accidents 
 If work started before the 8th hour needs to be completed or continued to avoid grave obstruction or
to prevent prejudice to the business or operations 
  If overtime work is needed to achieve good weather or environmental conditions and the quality of work
and performance depend on these conditions 
 If urgent work needs to be done on equipment, installations, and machinery to avoid loss or damage 
 If work is required to preserve perishable goods or prevent its loss

Can an employee offset his or her filed undertime with overtime work?

The undertime cannot be offset with overtime. The employer cannot use the offset to keep the company from
compensating the employee with required overtime rates. The employee will be paid according to the hours of
work or rendered service. So if he or she worked for less than 8 hours, the compensation will be adjusted
accordingly. The undertime can be deducted through his or her wage or through other means.

EXAMPLES.

What is the computation for overtime pay on a regular work day?

Here's a sample computation based on the given values (monthly rate: Php18,000; factor rate: 258; 246 total
regular days + 12 regular holidays):

Daily rate: 18,000 x 12 / 258= Php837.21

Hourly rate (8 hours): 837.21 / 8= Php 104.65

Number of hours in excess of 8 hours (125% x hourly rate x number of hours rendered)
Overtime hourly rate: 1.25 x 104.65= Php 130.81/hour

What is the computation for overtime pay on a rest day?

*same values used in the computation

First 8 hours = 130%; beyond 8 hours = 169% /hour

First 8 hours: ((18,000 x 12) / 258) x 1.3 = Php1,088.37
Beyond 8 hours: [((18,000 x 12) / 258) x 1.69]/8 = Php176.86/hour

What is the computation for overtime pay on a special day?

*same monthly rate applied in the computation

Special day: (130% x basic pay)

18,000 x 1.3 = Php23,400
Special day premium pay: (i.e., 20 working days/month): 23,400/20=Php 1,170/day

Special day that coincided with a scheduled rest day: (150% x basic pay)
18,000 x 1.5 = Php 27,000
Special and rest day premium pay (i.e., 20 working days/month): 27,000/20= Php 1,350/day

What is the computation for overtime pay on a regular holiday?

*same monthly rate applied in the computation

Regular holiday: (200% x basic pay)

18,000 x 2 = Php36,000
Holiday pay (i.e., 20 working days/month): 36,000/20 = Php1,800/day
Regular holiday that coincided on a scheduled rest day: (260% x basic pay)
18,000 x 2.6 = Php46,800
Premium pay (i.e., 20 working days/month): 46,800/20= Php 2,340/day

What is the overtime pay computation for employees working on a night shift during a regular workday?

Monthly rate: Php10,000

Daily rate (20 working days/month): 10,000/20= Php500
Hourly rate (8 hours): 500/8= Php 62.50

110% x number of hours in excess of 8 hours (130% x hourly rate)

Night shift overtime hourly rate: 1.1 x (1.30 x 112.5)= Php 89.375/hour

What is the overtime pay computation for employees working on a night shift during a rest day?

110% x number of hours in excess of 8 hours (130% x hourly rate)

Monthly rate: Php10,000
Daily rate (20 working days/month): 10,000/20= Php500
Hourly rate (8 hours): 500/8= Php 62.50

110% x number of hours in excess of 8 hours (130% x hourly rate)

Night shift overtime hourly rate: 1.1 x (1.30 x 112.5)= Php 89.375/hour

What is the overtime pay computation for employees working on a night shift during a special day?
*same monthly rate applied in the computation

special day: 110% x (130% x basic pay)

10,000 x 1.3 = Php 13,000
Special day premium pay, night shift: (i.e., 20 working days/month): 1.1 x (13,000/20)= Php 715/day

Special day that coincided on a scheduled rest day: 110% x (150% x basic pay)10,000 x 1.5 = Php 15,000
Special and rest day premium pay (i.e., 20 working days/a month): 1.1 x (15,000/20)= Php 825/day

What is the overtime pay computation for employees working on a night shift during a regular holiday?
*same monthly rate applied in the computation

Regular holiday (200% x basic pay)

10,000 x 2 = Php 20,000
Holiday pay (i.e., 20 working days/month): 1.1 x (20,000/20) = Php 1,100/day

Regular holiday that coincided on a scheduled rest day (260% x basic pay)
10,000 x 2.6 = Php 26,000
Premium pay (i.e., 20 working days/a month): 1.1 x (26,000/20) = Php 1,430/day
INTRODUCTION
Learning Task 1.
Directions: The teacher will give the date of the holiday, then The student will write the title of the holiday in
the space provided
Title of Holiday Date of the Holiday
1. January 1
2. April 9
3. May 1
4. June 12
5. Last Monday of August
6. November 30
7. December 25
8. November 1
9. December 8
What holiday you wanted most and Why? Explain your answer.
Holiday, do you have any idea about the earnings of an employee if he or she work during holidays? Do you
know the percentage of his/her income for that day? Interview a relative , parents, brother or sister.
_________________________________________________________________________________________
__________________________________________________________________________________________
__________________________________________________________________________________________
_________

Let Y r be the employee’s compensation for one rest day then

Y r =r +(30 % ∙r ) or Y r =r ∙1.30
Regular January 1 New Year
Holiday Maundy Thursday
Good Friday
April 9 Araw ng Kagitingan
May 1 Labor Day
June 12 Independence Day
National Heroes Day (last Monday of August
November 30 Bonifacio Day
Eidul Fitr
Eidul Adha
December 25 Christmas Day
December 30 Rizal Day
Special January 2
Non- Chinese New Year
Working Day August 21
December 31
November 1
Black Saturday
December 24
 October 31
Special Holiday February 25

DEVELOPMENT
Learning Task 2.
Directions. Identify if the statement is True or False
1. Night shift differential rate can be greater then overtime pay rate.
2. Overtime pay rate for holidays and regular days are always different.
3. If an employee works for 12 hours, then the surely have an overtime pay.
4. It is possible that overtime pay can be given to an employee who works less than 8 hours.
5. Overtime pay is only given to those who works at night.
ENGAGEMENT
Learning Task 3.
Directions. Write the letter of the best answer. Show your computation at the back page of your paper.
1. Mr.Mondala’s daily rate is P 675.00. He works on a regular day from 8:00 am to 8:00 pm. How much
did he earn that day?
a. P 1,096.80 b. P 1, 110.90 c. P 1,123.60 d. P 1, 432. 40
2. Mr. Perlado earns P 560.00 when he works for 1o hours in a regular day. How much is his daily rate?
a. P 416.67 b. P 426.67 c. P 506.40 d. P 760. 10
3. Jen’s work as a call center agent starts at *:00 PM and ends at 6 :00 AM. If her hourly rate is P 80., how
much is his total earnings for a month if he works 20 days every month.
a. P 15,396.80 b. P 16, 210.90 c. P 17,280.00 d. P 17, 435. 00
4. Mr. Hernan worked for some hours yesterday ( a regular day). His daily rate is P 1,598.50. His total
earnings yesterday was P 2,000, and he started working at 7:00 A.M. How many hours did he work
yesterday?
a. 9.6 b. 9. 0 c. 8.9 d. 7.5
5. Mr. Sy is an assistant manager in 24/7 restaurant. Her shift schedule is from 10:00 PM to 8:00AM for
fifteen days without any holiday. The company agree that they pay both a night differential and an
overtime pay given the schedule. How much will she expect to receive after 15 days if her hourly rate is
P 105?
a. P 15,550.80 b. P 16, 770.90 c. P 17,146.50 d. P 17, 797.50

ASSIMILATION
Learning Task 4.
Directions. Copy and Write your answer in the space provided. Write your answer in a clean sheet of bond
paper.
1. How many hours are allowed for overtime work?
a. 4 b.6 c.8 d.10
2. . WHAT IS OVERTIME PAY?
____________________________________________________________________________________
____________________________________________________________________________________

3. HOW MUCH IS THE OT PAY OF AN EMPLOYEE?

 ___________________________________________________________________________________
___________________________________________________________________________________
__
4. WHAT IS NIGHT SHIFT DIFFERENTIAL?
Night shift differential refers to the additional compensation for work performed from _______ O’clock
in the evening to _________ O’clock in the morning.

5. HOW MUCH IS THE NIGHT DIFFERENTIAL OF AN EMPLOYEE?

___________________________________________________________________________________
___________________________________________________________________________________
___________________________________________________________________________________
___

References:
Department of Labor and Employment. “ Wage and Related benefits. Date Retrieved January 9,2021
from https://bwc.dole.gov.ph/index.php/forms?layout=edit&id=86
Business Math by Lopez, et.al (n.d.) Department of Education