Labor Code Art. 87
Overtime Pay Philippines: Are You Being Paid What You're Owed?
Nena, 31, has worked at a textile factory in Calamba, Laguna for four years. Lately, her supervisor has been requiring her to stay an extra two hours every day to meet quota. Her payslip hasn't changed. When she asked HR, they told her "kasama na yan sa monthly mo." She wasn't sure if she was being cheated. She was.
Overtime pay is one of the most commonly violated provisions of the Labor Code — partly because it's also one of the easiest for employers to mask. This guide breaks down the exact rates, the exact formula, and the exact peso amounts you should be checking on your payslip.
Your rights, simply: Article 87 of the Labor Code requires a minimum 25% premium for every hour you work past 8 hours on a regular day. The premium goes up to 30% if it's a rest day, special non-working day, or regular holiday. You cannot waive this — not even by signing a contract.
What overtime pay actually is
Overtime pay is the legally mandated premium your employer must pay for work performed beyond 8 hours in a day. The rule is in Article 87 of the Labor Code, and the premium varies depending on what kind of day you worked: regular workday, rest day, special day, or regular holiday.
OT rates for every type of day
Every type of day has a different OT premium. Knowing which rule applies is what separates correct pay from underpayment. The rates below come from Article 87 read together with Articles 93, 94, and DOLE's Handbook on Workers' Statutory Monetary Benefits.
Legal reference
Regular workday OT
OT sa karaniwang araw
+25% of hourly rate, paid on top of regular wages
Any hour worked beyond 8 on a Monday-Saturday regular workday
Rest day / special day OT
OT sa rest day o special day
+30% of the hourly rate already at 130% (so 169% of base hourly)
Hours past 8 on Sunday rest day or DOLE-declared special non-working day
Regular holiday OT
OT sa regular holiday
+30% of the hourly rate already at 200% (so 260% of base hourly)
Hours past 8 on a regular holiday (e.g., Independence Day, Christmas)
Holiday falling on rest day OT
Holiday at rest day OT
+30% of the hourly rate at 260% (so 338% of base hourly)
Hours past 8 when a regular holiday falls on your rest day
| Legal Concept | Filipino Term | English Meaning | When This Applies |
|---|---|---|---|
| Regular workday OT | OT sa karaniwang araw | +25% of hourly rate, paid on top of regular wages | Any hour worked beyond 8 on a Monday-Saturday regular workday |
| Rest day / special day OT | OT sa rest day o special day | +30% of the hourly rate already at 130% (so 169% of base hourly) | Hours past 8 on Sunday rest day or DOLE-declared special non-working day |
| Regular holiday OT | OT sa regular holiday | +30% of the hourly rate already at 200% (so 260% of base hourly) | Hours past 8 on a regular holiday (e.g., Independence Day, Christmas) |
| Holiday falling on rest day OT | Holiday at rest day OT | +30% of the hourly rate at 260% (so 338% of base hourly) | Hours past 8 when a regular holiday falls on your rest day |
The exact computation formula
Here's the math. Start by converting your daily rate to an hourly rate, then apply the right multiplier. We'll use Nena's numbers as an example: daily rate ₱610 (NCR minimum), working 8 hours, with 2 hours OT on a regular day.
Regular workday OT formula
OT pay = (Daily rate ÷ 8) × 1.25 × OT hours
Hourly rate: ₱610 ÷ 8 = ₱76.25
OT hourly rate: ₱76.25 × 1.25 = ₱95.31
For 2 hours OT: ₱95.31 × 2 = ₱190.62 per day in OT pay
Rest day OT formula
OT pay = (Daily rate ÷ 8) × 1.30 × 1.30 × OT hours
Hourly rate on rest day: ₱76.25 × 1.30 = ₱99.13
OT hourly on rest day: ₱99.13 × 1.30 = ₱128.86
For 2 hours OT on rest day: ₱128.86 × 2 = ₱257.73
Who does NOT get overtime
Article 82 lists categories of workers excluded from OT and other hours-of-work rules. The most important thing to know: position titles do not determine exemption — actual job duties do. Many "supervisors" are still rank-and-file under the law.
- Managerial employees — those whose primary duty is to manage the establishment or a department, customarily directing two or more employees, with authority to hire/fire or whose recommendation on hiring carries weight.
- Field personnel — non-agricultural employees whose actual hours of work cannot be determined with reasonable certainty (e.g., outside sales agents, route inspectors).
- Government employees — covered by Civil Service rules, not the Labor Code's hours-of-work provisions.
- Members of the employer's family — those dependent on the employer for support.
- Domestic helpers (kasambahay) — covered by RA 10361 with their own hours-of-work and rest day rules.
- Workers paid by results — piece-rate, task-rate, or commission workers (some exceptions apply when DOLE has set standards).
Compressed workweek: when 10-hour days are legal
DOLE allows employers to arrange a compressed workweek — usually 4 days × 10 hours, or 3 days × 12 hours — without paying overtime for the extra daily hours, IF certain strict conditions are met. The setup requires: (1) employee consent in writing, (2) notification to DOLE through Department Advisory No. 02-04 procedure, (3) total weekly hours not exceeding 48, and (4) no diminution of existing benefits. If even one requirement is missing, the arrangement is void and standard OT rules apply.
Mandatory section
For OFWs / Para sa OFW
OFW overtime pay follows your POEA Standard Employment Contract and host country labor laws — not the Philippine Labor Code. Each occupation category has its own POEA contract with its own OT rules.
- Seafarers — POEA Standard Employment Contract for Seafarers sets OT at a guaranteed minimum (typically 105 hours/month fixed OT pay) plus actual OT at 1.25× hourly rate beyond that.
- Land-based OFWs — OT rules depend on the host country's labor code. Saudi Arabia, UAE, and Hong Kong all have separate (and different) OT premiums. Check your specific contract.
- Domestic workers abroad (e.g., kasambahay in HK or Singapore) — OT is usually replaced by rest day pay rules under bilateral agreements. The POEA contract specifies the minimum standards.
- If your foreign employer refuses to pay OT mandated by your POEA contract, file at the embassy POLO or the NLRC. Your recruitment agency is solidarily liable under RA 10022.
Real Filipino scenario
Nena Cruz, factory worker
Nena, 31, works at a garment factory. Her daily wage is ₱520 (Region IV-A minimum). For the past 8 months, her supervisor has been requiring her to stay 2 hours longer each day to meet production quota — Monday through Saturday. Her payslip never changed. When she asked HR, they said the extra hours were 'kasama na sa monthly mo na ₱14,500.'
What Nena Cruz should do
- Compute the shortfall: 384 OT hours × ₱81.25 = ₱31,200 owed (minimum)
- Save every payslip, employment contract, and any timekeeping records
- Keep a personal daily log of clock-in / clock-out times going forward
- Send a written demand to HR citing Art. 87 — give them 7 days to respond
- If unresolved, file SEnA at DOLE Region IV-A in Calamba
What most Filipinos get wrong about this
MythMy employer can offset my OT by giving me comp time instead of pay.
Truth: Not unilaterally. Comp time can only replace OT pay through a written compressed workweek arrangement approved by DOLE, or a CBA. Otherwise, OT must be paid in cash at the premium rate.(PD 442, Art. 87)
MythI waived OT by signing my employment contract.
Truth: You cannot waive mandatory OT pay. Article 6 of the Labor Code says rights granted by law cannot be diminished by contract. Any 'all-in' salary clause that absorbs OT is void to the extent it pays less than the legal premium.(PD 442, Art. 6)
MythManagers and supervisors don't get OT — so anyone with a title doesn't get OT either.
Truth: Only true managerial employees are exempt under Art. 82. The test is functional, not titular: do you actually manage the establishment, hire/fire employees, and exercise independent judgment? Many 'team leads' and 'supervisors' are still rank-and-file under the law and entitled to OT.
MythOT pay is taxed at a higher rate, so it's not worth claiming.
Truth: False. OT pay is taxed at the same income tax bracket as regular wages — there's no separate or higher OT tax. And if your employer underpaid you, you're entitled to the shortfall plus 10% legal interest, plus possibly damages.
How to claim what you're owed
Track every hour worked yourself
Keep a personal log: clock-in time, clock-out time, lunch break duration. Don't rely solely on the company's biometrics — they can be edited. Your handwritten or digital log is admissible evidence.
Save all payslips and contracts
Your payslip should show basic pay, OT pay, night differential, and holiday pay as separate line items. If OT is missing despite the hours, that's documentary evidence of underpayment.
Compute your shortfall
Use the formula: (Basic daily rate ÷ 8) × 1.25 × OT hours = OT owed per day. Multiply across the period of underpayment. Add the OT for rest days and holidays at the higher rates.
Send a written demand letter
Write to HR or your employer, cite Article 87, attach your computation. Give them 7 days to respond. This creates a paper trail that supports your DOLE case.
File at DOLE through SEnA
If unresolved, file a Request for Assistance at the nearest DOLE Regional Office. SEnA is mandatory conciliation before any formal labor case. Free, no lawyer needed, typically resolves in 30 days.
Frequently asked questions
Can my employer give me 'time off in lieu' instead of OT pay?
Generally no. Article 87 requires monetary payment for overtime work. Time off in lieu is only valid through a CBA (collective bargaining agreement) or a DOLE-approved compressed workweek arrangement — and even then, it must be voluntary on the employee's side. Unilateral conversion of OT to comp time is illegal.
Does my OT pay include allowances and bonuses?
No. OT pay is computed based on your regular hourly rate, which is your basic salary divided by working days then divided by 8. Allowances (transportation, meal, COLA) and bonuses (13th month, performance bonus) are excluded from the base for OT computation.
What's the prescription period for OT claims?
Three years from the time the OT was supposed to be paid, under Article 306 of the Labor Code. If you worked unpaid OT in January 2023, you have until January 2026 to file. After that, the claim is forfeited regardless of merit.
If I voluntarily work past 8 hours without my employer asking, do I still get OT?
Only if your employer knew and either expressly or impliedly allowed it. The legal standard is whether the work was 'required, suffered, or permitted' by the employer. If you secretly stayed late to finish personal tasks, that's not OT. If your employer saw you stay and didn't stop you, that's compensable OT.
Can my employer require me to render overtime?
Generally no, you cannot be forced. But Article 89 allows mandatory OT in specific emergencies: imminent danger to life or property, urgent machinery repair, perishable goods, and similar narrow situations. Outside of these, OT is voluntary — but if you accept, you must be paid the premium.
Sources
- 01.Presidential Decree No. 442, Art. 87 (Overtime Work), Art. 82 (Coverage), Art. 89 (Emergency OT, officialgazette.gov.ph)
- 02.DOLE, Handbook on Workers' Statutory Monetary Benefits (2024 edition, bwc.dole.gov.ph)
- 03.DOLE Department Advisory No. 02, Series of 2004 — Implementation of Compressed Workweek Schemes, dole.gov.ph
About the author
Written by Irvin Abarca with research support from Claude AI. Irvin is the founder of BatasKo, based in Dumaguete City.
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