How night shift differential is computed
Employees who work between 10 PM and 6 AM are paid an additional 10% of their regular hourly rate for each hour worked in that window.
The rule
Under Article 86 of the Labor Code, an employee who works between 10 PM and 6 AM is entitled to an additional 10% of the regular wage for each hour of work in that period.
Formula
Night differential = hourly rate × 10% × night hours worked
Example
Hourly rate ₱100. The employee works from 10 PM to 6 AM, which is 8 hours in the night window.
- Night differential: ₱100 × 10% × 8 = ₱80.
- Basic pay for those hours is paid as usual, and the ₱80 is on top.
When the night hours are overtime
If the night hours are overtime on an ordinary day, the overtime rate is 125% of the hourly rate, which is ₱125. The night differential is 10% of that, or ₱12.50, so each such hour pays ₱137.50.
Who is covered
The rule covers employees in the private sector. Some employees are excluded by law, for example government employees, managerial employees and field personnel, and employees of retail and service establishments regularly employing fewer than five workers. Check the exclusions that may apply to your workforce.
Questions people ask
What hours count for night differential?
The period between 10 PM and 6 AM.
How much is night differential?
An additional 10% of the regular hourly rate for each hour worked within that period.
Sources
- Labor Code of the Philippines, Article 86 (night shift differential)