Premium Pay Computation Guide Philippines
If you work within eight (8) hours during non-work days such as your rest days or during special days, you are entitled to receive an additional compensation or pay. This pay is a percentage of your daily basic pay, plus your daily basic pay. This is called premium pay.
But how do you differentiate special days from regular holidays?
The COLA or Cost of Living Allowance is not included in the premium pay computation unlike in the computation of the holiday pay.
There are 12 regular holidays in a year under Executive Order No. 292, as amended by Republic Act 9849. Regular holidays for example are the New Years day, Christmas day, Good Friday, Labor day etc.
On the other hand, there are three (3) Special Days in a year. Aside from these days, additional special days may still be proclaimed by the President or the Congress. The following are the special days in a year under Executive Order No. 292, as amended by Republic Act 9849.
- Ninoy Aquino Day – set on a Monday nearest August 21
- All Saints Day November 1
- Last Day of the Year December 31
Premium pays are paid ONLY if you worked during these special days. Therefore it is considered as “NO WORK, NO PAY”. On the other hand, there are cases wherein workers may not be required or permitted to work on special days. In such cases, workers are not entitled to any additional compensation.
Three cases for premium pay computation.
- If worked during rest days or on special days.
- If worked during rest day which is also a special day
- If worked during a regular holiday which is also the employee’s rest day
To illustrate the differences among these three cases, let’s use the following wage data from the 2016 Wage Order for the National Capital Region (NCR)
Non-Agriculture Industry:
- Basic wage : Php 481.00
- COLA: Php 10.00
- Minimum Wage: Php 481 + Php 10 = Php 491.00
Retail /Service Establishments Industry
- Basic wage : Php 444.00
- COLA: Php 10.00
- Minimum Wage: Php 444 + Php 10 = Php 454.00
Case 1: If worked during rest days or on special days.
The worker shall receive an additional compensation of at least thirty percent (30%) of the basic pay for a total of one hundred thirty percent (130%) of the worker’s basic pay. COLA is not included.
For example, using the basic wage for the National Capital Region (NCR)
|
Sector/ Industry | Rate |
Entitled Pay |
| Non-agriculture | P481.00 | P481 x 130% = P625.30 |
| Retail/Service Establishment | P444.00 | P444 x 130% = P577.20 |
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Case 2: If worked during rest day which is also a special day
The worker shall receive an additional compensation of at least fifty percent (50%) of the basic pay for a total of one hundred fifty percent (150%) of the worker’s basic pay. COLA is not included.
| Sector/ Industry | Rate |
Entitled Pay |
| Non-agriculture | P481.00 | P481 x 150% = P721.50 |
| Retail/Service Establishment | P444.00 | P444 x 150% = P666.00 |
Case 3: If worked during a regular holiday which is also the employee’s rest day.
The worker shall receive a holiday pay of two hundred percent (200%) of the minimum wage [200% x (basic pay + COLA)]. Plus additional compensation of thirty percent (30%) of the two hundred percent (200%) of the basic pay (without the COLA) shall be received [30% x (200% x basic pay)]
|
Sector/ Industry | Rate |
Entitled Pay |
| Non-agriculture | P481.00 | 200% (P481+P10) + 30% ( 200% x P481 ) = P1270.60 |
| Retail/Service Establishment | P444.00 | Not covered by holiday pay
rule |
Aside from the special day, holiday and rest day, there is the Special Work Days. If the company declared a special work day, an employee is entitled only with daily wage rate since work is considered as a work on an ordinary workday. Therefore, there is no premium pay.