UNIFIED SUPPLEMENTARY LEARNING MATERIALS

ABM-BUSINESS MATHEMATICS
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MATHEMATICS 3
WEEK 5

DEVELOPMENT & EDITORIAL TEAM:

REX L. MAGDALUYO

LESSON 5 – OVERTIME PAY

MOST ESSENTIAL LEARNING COMPETECIES
Identify the variables needed in the computation of the overtime. ABM_BM11SW-IIe-8
Compute overtime pay. ABM_BM11SW-IIe-9

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EXPECTATIONS

* Identify the variables needed in the computation of the overtime.

* Compute overtime pay

PRETEST
A. Identify if the statement is True or False
1. Night shift differential rate can be greater than overtime pay rate.
2. Overtime pay rate for holidays and regular days are always different.
3. If an employee work for 12 hours, the he surely have an overtime pay.
4. It is possible that overtime pay can be given to an employee who works
less than 8 hours.
5. Overtime pay is only given to those who works at night.
6. All employees are required to work overtime.
7. Daily rate is sometimes equal to hourly rate.
8. If the hourly rate of employee A is equal to the daily rate of employee B,
then employee A earns more than the employee B on a daily basis.
9. If an employee worked for 6 hours yesterday and work 10 hours today,
then he will receive an equivalent to 2 -day daily rate.
10. If an employee works on his rest day, then he will automatically earn
an overtime pay.

B. Solve the following problems.

11. Myrna works on a holiday for 11.5 hours. How much is her additional
income on that day? (Additional income is the difference of the total
daily income and the regular daily income.)
12. If Ms. Abigael wants to earn thrice of her daily income, how many
hours should she be working? (considering no night shift differential
pay, only overtime pay.)
13. Mr. Cruz’s work starts from 3:00 PM until 12:00 midnight. If his
hourly rate is Php 567.50, how much is his daily income?
14. An employee has a daily rate of Php 456.76. How much is his monthly
earnings if he works for 24 days a month and 2 holidays in every month,
and he incurred a total overtime of 12 hours?
15. Sarah works for 9 hours and earns Php 3,890 on a regular day. How
much is her overtime pay?

LOOKING BACK TO YOUR LESSON BRIEF

A.  Directions: Write the letter of the correct answer in a sheet of paper.

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1. This are the fixed periodical payments made to persons doing or engaged in
manual work.
A. Wages B. salaries C. Honorarium D. pledges
2. These usually calculated by number of days the person has rendered
service.
A. Honorarium B. pledges C. Wages D. salaries
3. This given when a person works overtime, he is given a “time and a half”.
A. Straight time wages B. overtime wages C. wages D. Salaries
4. It is money that an individual receives in exchange for providing a
good/service or through investing capital.
A. Income B. benefit C. wages D. Salaries
5. What is the employee compensation given by an employer on top of the basic
salary/wage?
A. Income B. benefit C. wages D. Salaries
 
INTRODUCTION

Calculating Overtime Pay

If you’re working for more than eight hours, then that’s considered overtime,
whether or not it’s a regular day or a rest day.
Whether your regular shift is at night matters, too: working anytime from 10:00
PM to 6:00 AM would fall under a night shift. This qualifies for Night Shift
Differential (NSD), where you get an additional 10%.

Here’s a table of the overtime rates, assuming 100% for regular hours on a normal day
shift:  
Non-Night Shift Night Shift

Normal Day 125% 137.5%

Rest Day 169% 185.9%

Special Non-Working Day 169% 185.9%

Special Non-Working Day and Rest Day 195% 214.5%

Regular Holiday 260% 286%

Regular Holiday and Rest Day 338% 371.8%

As for how we calculated the overtime rates in the table above:

Normal Work Day: 125% of your hourly rate

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Rest day, special non-working day, regular holiday, and all combinations:
130% of your hourly rate on these days (based on the first table)
Night shift: 110% of your overtime hourly rate (based on the non-night shift
column)
Sample Calculations
Say that you’re earning P100 per hour.
1.) If you’re planning to put in overtime on a regular day, just multiply your hourly
wage by the rate to get your overtime pay per hour:
P100 x 125% = P125 per hour
2.) If you choose to work on a rest day, your hourly wage for the first eight hours
will be:
P100 x 130% = P130 per hour
But once you’re on your ninth hour, your hourly wage goes up to:
P100 x 169% = P169 per hour
3.) Finally, if you overtime on a regular night shift:
P100 x 137.5% = P137.5 per hour
But if that night shift also happens to be a rest day:
P100 x 185.9% = P185.9 per hour

This additional compensation for work performed beyond eight hours a day is
what we called Overtime Pay. The following are the applicable laws and guidelines
on the computation of Overtime Pay in the Philippines.
All employees in all establishments and undertakings whether for profit or not
are entitled to overtime pay for work rendered beyond eight (8) hours. But this
does not apply to managerial employees, field personnel, members of the family of
the employer who are dependent on him for support, domestic helpers, persons in
the personal service of another, and workers who are paid by results. Employees
in the government are also entitled to overtime pay but they are governed by Civil
Service laws and rules. Only employees in the private sector are covered by the
Labor Code.
For health personnel in (1)cities and municipalities with a population of at least
one million (1,000,000) or in (2)hospitals and clinics with a bed capacity of at least
one hundred (100), their normal hours of work are eight (8) hours a day, for five
(5) days a week, exclusive of time for meals. (Article 83, LCP)
Health personnel includes resident physicians, nurses, nutritionists, dietitians,
pharmacists, social workers, laboratory technicians, paramedical technicians,
psychologists, midwives, attendants and all other hospital or clinic personnel.
Overtime work by health personnel included in the two abovementioned instances
is, as a rule, not allowed since it involves strenuous physical work considering the
number of patients or clients they must attend to.  However, they may be
compelled to work beyond such hours where the exigencies of the service require
that they work for six (6) days or forty-eight (48) hours. But the employer is

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required to pay an additional compensation of at least thirty percent (30%) of their
regular wage for work on the sixth day.
Can an employee be compelled to render overtime?
Generally, employers cannot compel the employee to render overtime, except in
certain instances (Sec 10, Rule I, Bk. III, IRR) to wit:
1) When the country is at war or when any other national or local emergency has
been declared by the National Assembly or the Chief Executive;
2) When overtime work is necessary to prevent loss of life or property, or in case of
imminent danger to public safety due to actual or impending emergency in the
locality caused by serious accident, fire, floods, typhoons, earthquake, epidemic or
other disaster or calamities;
3) When there is urgent work to be performed on machineries, installations, or
equipment, in order to avoid serious loss or damage to the employer or some other
causes of similar nature;
4) When the work is necessary to prevent loss or damage to perishable goods;
5) When the completion or continuation of work started before the 8th hour is
necessary to prevent serious obstruction or prejudice to the business or operations
of the employer;
6) When overtime work is necessary to avail of favorable weather or environmental
conditions where performance or quality of work is dependent thereon.
Can an employee insist to work overtime?
The employee cannot compel his employer to allow him to work overtime when the
circumstances does not require him to do so as when there is actually no work to
be performed.
Under time cannot be offset by overtime
Under time work on any particular day shall not be offset by overtime work on any
other day (Article 88, LCP). The reason behind this is fairness. If the employee
works for less than eight hours, he will be paid only for the corresponding number
of hours he had actually worked. If on another day he works beyond the maximum
hours, he should be given additional compensation.
Non-payment of overtime pay is not only illegal but also contrary to public policy.
The employer cannot use the overtime to offset the under time because payment of
overtime pay is mandatory. However, he may either deduct the under time from
the wage of the employee, or through other approaches. Although these methods
are not provided by law, these may be found in company policies or established by
company practices.
Computation of wages

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The Department of Labor and Employment (DOLE) has set out the following rules
in computing overtime pay, pay for work done on holidays, premium on nightshift
and 13th month pay:

Computing Overtime:
On Ordinary Days
Plus 25% of the hourly rate multiplied by the number of hours.
On a rest day, special day or regular holiday
Plus 30% of the hourly rate on said days multiplied by the number of hours.
Computing pay for work done on:
A special day (130% x basic pay)
A special day, which is also a scheduled rest day (150% x basic pay)
A regular holiday (200% x basic pay)
A regular holiday, which is also a scheduled rest day (260% x basic pay)
Computing Night Shift Premium Where Night Shift is a Regular Work:
On Ordinary day (110% x basic hourly rate)
On a rest day, special day, regular holiday (110% of regular hourly rate for a rest
day, special day, regular holiday)
Computing Overtime on Night Shift:
On ordinary day (110%  x overtime hourly rate)
On rest day, special day or regular holiday (110% x overtime hourly rate for rest
days, special days, regular holidays)
Computing 13th Month Pay:
Total basic salary earned for the year exclusive of allowances, overtime, holiday,
and night shift differential pay divided by 12 months = 13th month pay.
Sample computation of Overtime Pay per Hour
Let us assume a regular daily wage rate of Php 404.00, what is the overtime rate
per hour?
On Ordinary days:
First, let’s compute for the hourly wage rate as follows:
Regular hourly rate = Daily wage rate / 8 hours
= P404/8
= P50.5 per hour
Then, let’s compute for the overtime rate per hour as follows:

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Overtime rate = hourly rate + 25% of hourly rate
= P50.5 + (.25 x 50.5)
=P50.5 + 12.65
=P63.125 per hour
On a rest day and special day
Computation of hourly wage rate:
Hourly rate = 130% of Regular Hourly Rate
= P50.5 x 1.3
= P65.65 per hour
Computation of overtime rate:
Overtime rate = Hourly rate + 30% of Hourly rate
= P65.65 + (30% of P65.65)
= P65.65 + P19.695
= P85.345 per hour
On a rest day which falls on a special day
Computation of hourly wage rate:
Hourly rate = 150% of Regular hourly rate
=P50.5 x 1.5
=P75.75 per hour
Computation of overtime rate:
Overtime rate = Hourly rate + 30% of Hourly rate
= P75.75 + (30% of P75.75)
= P75.75 + 22.725
= P98.475
On a regular holiday
Computation of hourly wage rate:
Hourly rate = 200% of Regular hourly rate
=P50.5 x 2
=P101 per hour
Computation of overtime rate:
Overtime rate = Hourly rate + 30% of Hourly rate
=P 101 + (30% of P101)
=P101 + 30.3
=P131.3 per hour

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On a rest day which falls on regular holiday

Computation of hourly wage rate: Computation of overtime rate:
Hourly rate = 260% of Regular hourly rate Overtime rate = Hourly rate + 30% of
Hourly rate
=P50.5 x 2.6 =P 131.3 + (30% of P131.3)
=P131.3 per hour =P131.3 + 39.39
=P170.69 per hour

ACTIVITIES
Answer the following question:
1. Dominique works the 11p.m. to 7 a.m. shift at the Sun Valley Nursing
Home. This means that she has to get to Sun Valley by 10:45 in order to
change into her uniform. And, before she leaves in the morning, she is
expected to give a report to the person who comes in to take her place on the
daytime shift. So Dominique does not actually get out of the nursing home
until 7:30. If Dominique gets a half hour meal break each night, does she
get any overtime?
Overtime: hours____________ + minutes_____________
Dominique makes Php 50.00 an hour. How much overtime pay should she
get? Overtime rate: Php __________per hour Overtime pay: Php______________

CHECKING YOUR UNDERSTANDING

1. Alda and Nora work in a home furnishings factory. Their regular shift is 8-
4:30, (with 1/2 hour off for lunch) Monday - Friday. It is busy season, and
the supervisor asks them both to come in on Saturday. They both work 8
hours on Saturday. However, Nora had taken a half day (4 hours) off on
Wednesday to take her child to the hospital. How many hours of overtime
pay will each woman receive?
Alda's overtime: hours____________ + minutes_____________
Nora's overtime: hours____________ + minutes_____________

Alda and Nora are paid piece rate for the work they do. They get Php 2.00 for
each piece they sew. An average worker can sew about 50 to 60 pieces in an
hour. Alda is new on the job, and can just sew 40 pieces an hour. Nora is an
excellent worker, and sews an average of 70 pieces an hour. How much
overtime pay does each woman get?
Alda's overtime rate: Php________per hour Alda's overtime pay: Php________

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Nora's overtime rate: Php_______per hour Nora's overtime pay: Php________

POST TEST

Answer the following questions;

1. Jason is an administrative assistant in a large office. He works Monday -
Friday, 9:00 am through 5:00 pm, with a half hour off for lunch. He gets
paid a weekly salary of Php 5, 750.00. One Friday, Jason is asked to work
late. The company is moving into bigger offices upstairs in the building, and
the office manager asks for volunteers to stay late and box up everything to
get it ready for the movers on Saturday. Jason works until 8:00pm. Is he
entitled to overtime pay? If so, for how much time? Audrey, the office
manager, and Mr. Santos the general manager, also pitch in that evening
and help get ready for the move. Does Audrey get overtime? Does Mr.
Santos? Audrey makes a yearly salary of Php 350,000. Mr. Santos makes
Php 750,000.
How many hours of overtime did each person work?
Jason's overtime: hours____________ + minutes_____________
Audrey's overtime: hours____________ + minutes_____________
Mr. Santos overtime: hours____________ + minutes_____________
How much overtime pay should each person get?
Jason's overtime rate: Php _______per hour Jason's overtime pay: Php_________
Audrey's overtime rate: Php ______per hour Audrey's overtime pay: Php ________
Mr. Santos overtime rate: Php_____ per hour Mr. Santos’ overtime pay: Php____

REFERENCES
Lopez,B.R, Lundag, L.C. and Dagal, K.A (2016)
Business Math: Q.C.
Vibal Group, Inc

Villanueva, T.T., Tesorio, M.V. and Male, F.G.(2017)

Business Mathematics: V.C.
Tru-Copy Publishing House, Inc.

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