home Career Guide How to Compute Night Shift Differential Pay?

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.

  1. 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
  2. Retail and service establishments regularly employing not more than five (5) workers
  3. Kasambahay and persons in the personal service of another;
  4. Managerial employees
  5. Officers or members of a managerial staff
  6. 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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