How late, undertime and absence deductions are computed
A late or undertime deduction is the minutes missed times the per-minute rate, which is the hourly rate divided by 60, and an unpaid absence deducts one full daily rate.
The formulas
Per-minute rate = hourly rate ÷ 60
Late or undertime deduction = minutes missed × per-minute rate
Absence deduction = daily rate × unpaid days
See how to compute the daily and hourly rate if you need the rates first.
Example
An employee has an hourly rate of ₱150 and arrives 25 minutes late.
- Per-minute rate: ₱150 ÷ 60 = ₱2.50
- Deduction: 25 × ₱2.50 = ₱62.50
Good practice
- Write the grace period, the way minutes are counted (per minute or in blocks) and any monthly cap into the attendance policy.
- Let employees file a correction before the cut-off when a time log is missing, so payroll does not penalize a forgotten clock-out.
- Show each deduction as its own line on the payslip.
For the product steps, see Approve or reject DTR corrections and Review attendance logs.
Questions people ask
Can an employer deduct pay for being late?
Yes, for the time actually not worked, under the no work, no pay principle. The deduction should follow a written company policy and should not exceed the pay for the minutes missed.
What is a grace period?
A set number of minutes after the scheduled start during which arrival is not counted as late. It is a company policy and not a legal requirement.
How is an absence deducted for a monthly-paid employee?
One daily rate is deducted for each unpaid absence. The daily rate comes from the monthly salary and the company's divisor.
Does an approved leave count as an absence?
A paid leave does not reduce pay. An unpaid leave deducts the daily rate for each day.
Sources
- Labor Code of the Philippines, Article 82 and the no work, no pay principle