How to Compute Night Shift Differential Pay?
The BPO industry is booming and there’s a continuous demand for call center agents. Since most clients of call center companies are western countries with big time difference from ours, office hours are usually overnight. So employees work on night shift and are paid with “night diff” adjustment. So now let us show you how to compute night shift differential pay.
Night Shift Differential (NSD) is the additional ten percent (10%) compensation to an employee’s regular wage to each hour of work performed between 10pm and 6am. The basis for the computation is the basic pay. The cost of living allowance (COLA) is not included in the computation.
According to the law, night differential pay applies to all employees except for the following.
- Government employees employed by the National Government, by any of its political subdivisions, by government owned and controlled corporations (GOCC’s) with original charters or under special laws
- Retail and service establishments regularly employing not more than five (5) workers
- Kasambahay and persons in the personal service of another;
- Managerial employees
- Officers or members of a managerial staff
- Field personnels
How to Compute Night Shift Differential Pay?
There are different scenarios or cases on how to compute night shift differential pay. To illustrate the differences among these cases, let’s use the following wage data from the 2016 Wage Order for the National Capital Region (NCR)
Basic wage for NCR:
- Non-Agriculture Industry: Php 481.00
- Retail /Service Establishments Industry: Php 444.00
To understand how these are computed, we are going to use the different “Wage Pay Factors” for Overtime pay, Holiday pay, Premium pay, etc. You can read more from them in their respective links.
For example, night shift is performed on a regular holiday. Just substitute the “NSD factor” depending when the night shift work is performed.
| Sector/ Industry | Rate | Overtime Pay Computation |
| Non-agriculture | P481.00/day or P60.13/hour | = P60.13 x (NSD factor) x (No. of hours night shift work)
= P60.13 x 220% x (No. of hours night shift work) |
| Retail/Service Establishment | P444.00/day or P55.5/hour | = P55.5 x (NSD factor) x (No. of hours night shift work)
= P55.50 x 220% x (No. of hours night shift work) |
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The following are the NSD Factors to be used for you to understand how to compute night shift dfferential pay.
| When Is the Work Done? | Wage Pay Factor |
| Ordinary day | 100% = 1 |
| Sunday or Rest day | 130% = 1.3 |
| Special day | 130% = 1.3 |
| Special day falling on Rest day | 150% = 1.5 |
| Regular holiday | 200% = 2 |
| Regular holiday falling on Rest day | 260% = 2.6 |
| Double holiday | 300% = 3 |
| Double holiday falling on Rest day | 390% = 3.9 |
| Ordinary day, Night shift | 1 x 1.1 = 1.1 or 110% |
| Rest day, Night shift | 1.3 x 1.1 = 1.43 or 143% |
| Special day, Night shift | 1.3 x 1.1 = 1.43 or 143% |
| Special day, Rest day, Night shift | 1.5 x 1.1 = 1.65 or 165% |
| Regular holiday, Night shift | 2 x 1.1 = 2.2 or 220% |
| Regular holiday, Rest day, Night shift | 2.6 x 1.1 = 2.86 or 286% |
| Double holiday, Night shift | 3 x 1.1 = 3.3 or 330% |
| Double holiday, Rest day,Night shift | 3.9 x 1.1 = 4.29 or 429% |
| Ordinary day, Overtime | 1 x 1.25 = 1.25 or 125% |
| Rest day, Overtime | 1.3 x 1.3 = 1.69 or 169% |
| Special day, Overtime | 1.3 x 1.3 = 1.69 or 169% |
| Special day, Rest day, Overtime | 1.5 x 1.3 = 1.95 or 195% |
| Regular holiday, Overtime | 2 x 1.3 = 2.6 or 260% |
| Regular holiday, Rest day, Overtime | 2.6 x 1.3 = 3.38 or 338% |
| Double holiday, Overtime | 3 x 1.3 = 3.9 or 390% |
| Double holiday, Rest day, Overtime | 3.9 x 1.3 = 5.07 or 507% |
| Ordinary day, Night shift, Overtime | 1 x 1.1 x 1.25 = 1.375 or 137.5% |
| Rest day, Night shift, Overtime | 1.3 x 1.1 x 1.3 = 1.859 or 185.9% |
| Special day, Night shift, Overtime | 1.3 x 1.1 x 1.3 = 1.859 or 185.9% |
| Special day, Rest day, Night shift, Overtime | 1.5 x 1.1 x 1.3 = 2.145 or 214.5% |
| Regular holiday, Night shift, Overtime | 2 x 1.1 x 1.3 = 2.86 or 286% |
| Regular holiday, Rest day, Night shift, Overtime | 2.6 x 1.1 x 1.3 = 3.718 or 371.8% |
| Double holiday, Night shift, Overtime | 3 x 1.1 x 1.3 = 4.29 or 429% |
| Double holiday, Rest day, Night shift, Overtime | 3.9 x 1.1 x 1.3 = 5.577 or 557.7% |