Philippine Labor Law Glossary
Overtime Pay is additional compensation due to a covered employee for work performed beyond eight hours in a workday.
Basic Overtime Rule
Article 87 allows work beyond eight hours when the employee is paid the required additional compensation. On an ordinary workday, the minimum overtime rate is the employee’s regular wage for the overtime hours plus at least twenty-five percent. For overtime performed on a holiday or rest day, the additional compensation is at least thirty percent of the applicable rate for the first eight hours on that day.
The detailed computation depends on the employee’s wage basis, statutory coverage and whether the day is an ordinary workday, rest day, regular holiday or special day.
Coverage
The hours-of-work rules generally apply to covered employees in private establishments. Article 82 identifies excluded categories such as managerial employees and qualifying field personnel. Actual duties and working conditions—not job title alone—matter when determining coverage.
Regular Wage for Computation
Article 90 states that the regular wage used for overtime and other additional remuneration includes the cash wage without deductions for facilities provided by the employer. More favorable contractual or collective-agreement formulas remain enforceable.
Overtime Must Be Authorized or Permitted
An employer may dispute work performed without authorization, but actual knowledge, instructions, workload, system access and acceptance of the work may show that overtime was required or permitted. Employers should maintain reliable timekeeping and approval records.
Legal Basis
| Authority | Rule supported | Official source |
|---|---|---|
| Labor Code, Article 82 | Provides general coverage and exclusions. | Department of Labor and Employment |
| Labor Code, Article 87 | Requires additional compensation for work beyond eight hours. | Department of Labor and Employment |
| Labor Code, Article 90 | Defines regular wage for overtime and related additional remuneration. | Department of Labor and Employment |
Evidence and Records to Check
| Record | Why it matters |
|---|---|
| Daily time records and schedules | Show hours worked beyond eight. |
| Overtime requests and approvals | Show whether overtime was directed or permitted. |
| Messages, system logs and work output | May corroborate work outside recorded hours. |
| Payslips and payroll register | Show the rate and payment actually made. |
| Holiday and rest-day calendar | Determine the correct base and premium. |
| Employment duties and classification | Help determine coverage or exclusion. |
Overtime Pay Is Not Premium Pay
Overtime pay is triggered by work beyond eight hours. Premium pay is additional compensation for covered work on rest days, Sundays when they are established rest days, and special days. Both may apply to the same hours when the legal conditions overlap.
Undertime Cannot Be Offset
Article 88 provides that undertime on one day cannot be offset by overtime on another day. Payroll should account for each workday under the applicable rules.
Practical Example
Hypothetical example: A covered employee works ten hours on an ordinary workday. The first eight hours are paid at the ordinary rate, while the final two hours are overtime hours subject to the statutory additional compensation. If the same work occurred on a rest day, the applicable rest-day rate and overtime premium would both need to be considered.
Common Misunderstandings
Misunderstanding: A monthly salary automatically covers unlimited overtime.
Correct approach: A covered employee remains entitled to statutory overtime unless the employer proves a lawful exclusion or compliant payment arrangement.
Misunderstanding: Overtime begins only after 40 hours in a week.
Correct approach: Philippine statutory overtime is generally assessed after eight hours in a workday.
Sources and Legal Citations
- Labor Code of the Philippines, Articles 82, 87, 88 and 90, official DOLE text.
Editorial Review and Legal-Review Status
Prepared by: LaborCode.ph Editorial Team
Editorial review: Reviewed under the LaborCode.ph Content Review Policy
Source verification: Official legal sources checked on August 2, 2026
Research coverage: This entry is based on a comprehensive and exhaustive review of relevant Philippine labor-law sources.
Editorial approach: The material is presented as a written digest prepared by labor-law researchers and experts, offering selective but broad insights for general educational use.
Disclaimer
This glossary entry is for general educational and legal-information purposes and is not legal advice. Coverage and computation depend on actual duties, hours, the day worked and payroll records.