What is the divisor used to compute the daily wage of monthly paid employees for the purpose of computing the undertime pay?
April 12, 2010
The divisor used in arriving at an employee’s daily rate for the purpose of computing salary-related benefits is 261. From the 365 days in a year, we deduct 104 rest days which gives a total of 261 days. Now, if 261 days is the number of working days of the employees then, there is a disputable presumption that the employees are paid their holiday pay.[1]
In
It is argued that even without the presumption found in the rules and in the policy instruction, the company practice indicates that the monthly salaries of the employees are so computed as to include the holiday pay provided by law. The petitioner contends otherwise.
One strong argument in favor of the petitioner’s stand is the fact that the Chartered Bank, in computing overtime compensation for its employees, employs a “divisor” of 251 days. The 251 working days divisor is the result of subtracting all Saturdays, Sundays and the ten (10) legal holidays form the total number of calendar days in a year. If the employees are already paid for all non-working days, the divisor should be 365 and not 251.
x x x
Any remaining doubts which may arise from the conflicting or different divisors used in the computation of overtime pay and employees’ absences are resolved by the manner in which work actually rendered on holidays is paid. Thus, whenever monthly paid employees work on a holiday, they are given an additional 100% base pay on top of a premium pay of 50%. If the employees’ monthly pay already includes their salaries for holidays, they should be paid only premium pay but not both base pay and premium pay.
If the employer will use 261 as divisor in determining daily rate to compute overtime pay, the daily rate would be lower but an additional premium pay should still be paid to the employee for the eleven (11) holidays. If 250 is used as divisor, the basic rate used for computing the overtime pay will be higher and the employer will have to pay both the base pay and premium pay for the eleven (11) holidays.
[1] Producer’s Bank vs. NLRC, G.R. No. 100701, 28 March 2001.
[2] G.R. No. 79255, 20 January 1992.
[3] G.R. No. L-44717, 28 August 1985.
Previous Comments
hi mario! usually, you could just divide your monthly basic salary by the number of working days per month to get your daily rate. however, there are employers who include the holiday pay in the basic monthly salary… you ask your employer or you check your employment contract for information.
Posted by rebecca at April 20, 2010, 2:50 pmHi Atty., I am confronted with a question from the staff that I find confusing. We say that we are monthly-paid staff, but we are using 262 (not considered paid during Saturdays and Sundays or rest days) as a divisor in determining rate and salary-related benefits of staff. The complication came when P-Noy stopped moving holidays, as this year, 6 regular holidays will fall on Saturdays and Sundays, recently April 9 and May 1. If you use the same factor, the questions: (1) Do you add additional day of pay for holidays that fall on scheduled rest days? (2) Argument of staff is that there are actually 260 regular work days for 2011, with 5 holidays falling on the regular working days and 6 regular holidays falling on Saturdays and Sundays. Following their argument, we get paid for 255 regular work days and 5 regular holidays (un-worked), but not for 6 holidays that fall on rest days. How do you explain this to your staff? (3) Can the divisor (262) be used for monthly-paid or is this for daily paid only?
Thanks!
Posted by Jaz at May 16, 2011, 9:32 am1) no. Holidays are paid even if unworked just because it is not the employee’s fault that they are not supposed to work on that day. Hence, they should earn on holidays considering that they are willing to work but they dont or they cant kse nga holiday.
2) correct. They dont get paid on those holidays fallin on rest days. Theyr not supposed to earn on those days naman talaga. Rationale of the holiday pay as previously stated. 3) the divisor is used for monthly paid kse if daily paid, sakto na yun, you dont have to compute na.ü i hope i was able to help u in a way. The best way to explain is to understand why the law requires payment of holiday pay. May principle dn kse na if the employee is willing and able to work, he shud not be prevented from doing so para he cud earn. Now justa because its a holiday, parang inalisan m na sya ng opportunity to earn kya altho unworkd, dpat bayaran. The same does not hold true pgholiday na restday. Pero if worked malaki ang premium.
What if in case of a monthly paid employee who is required only to report 4 or 5 times a month….how will we compute the net salary if the particular employee reported only for 3 times a month? what is the basis for the computation of deduction for absences…? would it be the monthly salary divided by by the number of days the employee is required to work? knidly enlighten me on this…thanks
Posted by ERSON ORFANEL at June 2, 2011, 8:54 pmit depends, sir. Are you a regular employee? What is the nature of your work? Why are you required to report only 4-5 times a month? Is your monthly pay only for the 4-5 days you are required to report? There are certain types of jobs/employment in which the employee may be paid even without reporting for work such as results-based employment and the like. There would be different factors to consider specially with the peculiar set up of your employment.
Posted by rebecca at June 3, 2011, 11:52 amGood day,
last time we got a problem from our payroll, normally kasi consistent yung sweldo namin hinahati sa dalawang cut off yung kabuang sweldo namin, btw we are regular and offered monthly basis, until this last 2 payroll medyo nagkaproblema, nagulat kami dahil nauna computed in 12 days and last one is 10 days syempre mas maliit yung 10 days compared sa 12 days and sa normal na natatanggap namin, yun pala ginawa kaming daily basis, my question is pwede ba sa monthly basis ang computation ng daily basis? kasi kung daily ang computation magiging inconsistent na yung matatanggap namin every payroll. and how we achieved the offered ex. 20k which is divided by 2, 10k ang marerecv namin every cutoff if the computation is daily?
Thanks
Posted by Juan at July 2, 2011, 6:48 pmhi juan… check your contract with your employer… bka kse daily nkalagay… if monthly, then pde pa rin nmn compute daily divide by number of days lang…
Posted by rebecca at July 6, 2011, 3:16 pmHi Rebecca,
Wala naman nakalagay sa contract namin na daily basis kami, ang nakalagay lang is xx,000 NET Monthly, ang ginawa kasi divided by 22days agad ex. 22,000 / 22 = 1,000 per day, then kung ilang araw lang mabilang every cutoff yun na ang sweldo namin, for example pag february, last payroll is equivalent into 9 days so 9,000 lang yun lang ang mareresib namin, Tama ba sa monthly basis yun?
Thanks.
Posted by Juan at July 10, 2011, 8:16 pmiam a monthly rated employee. currently my employer used 30 days in computing my daily rate. meaning 360 days in a year. Is this legal or there is a standard divisor in computing daily rate of a monthly rated employee. Hope you can clarify my inquiries.
Posted by Annie at July 13, 2011, 2:34 pmGood day.
I would like to know how to compute correctly the overtime pay of employees who do not work and are not considered paid on Sundays or rest days (314 divisor/factor)
The current OT computation of my hubby’s employer are as follows:
Example basic pay: 10,000
Computation of OT pay on a Saturday for 5 hours rendered:
((10,000×12/314)/8)*5)*1.5 or equivalent to 358.28
Kindly take note that my hubby works for a private firm. Also the above computation is for an overtime rendered on a Saturday, no work, not a holiday.
Question is, is the above computation correct? Recently the employer adjusted the rate, instead of x150%, they changed it to 50% because according to the employer, the 100% is already paid and part of its basic pay and that, the employee gets paid on a Saturday (314 factor).
Please enlighten me on this one.
Sincerely,
Khassim
Tama po ang employer ng asawa nio. Bayad na po ang saturdays sa 314 days factor. Kung pumasok siya sa sabado, yung premium na lang ibabayad sa kanya. Buti nga ho 50% pa ang binayad n OT premium. Di naman ho yan holiday. Rest day lang po yan. Saka isa pa po, benefits na ho ng mga empleyado yan. Kahit nga po di n bigyan ng premium pag pumasok sa sabado. Sa batas po kasi, and dapat na maibigay na oras ng pagtatrabaho ng isang manggagawa sa loob ng isang linggo ay 48 hours. Kasama po dito ang 8 oras sa sabado. Kya pde papasukin ng employer and isang manggagawa sa sabado na di na kailangan bigyan p ng dagdag na sweldo hanggat ang factor na ginagamit niya ay 314 days.
Posted by HR at July 27, 2011, 10:07 amgud am po. ang divisor po ng company namin ay 365. ano po ibig sabihin nyan, paid po kahit non-working days?. my monthly gross pay po 15,310.00 tapos ang hourly rate ko po ay 62.92. tama po ba ang computation nila. call center agent po ako. walang pili ang days of work. kahit holidays. in 1week, may 4days na tig 10hours at isang 8hours, two days off. minsan, in a week nman, tag 8hours at isang day off.
Posted by mitch at October 26, 2011, 10:29 amgood day po,
paki expand naman po ang meaning nang monthly-paid employees kase hindi masyadong clear ang sa labor code eh.
Pag hindi po ba pinapasok ng employer ang employees kase no operation for that week ay fixed parin ang sasahurin ng monthly piad or babawasan kase sa weeks na no work due to no operation?
Thanks
Posted by rila at December 6, 2011, 11:59 am



Please help my dilemma.
Montly basic P.18,000
How to compute my daily rate? is the divisor 26?
If yes/no is there a law on this that i can use to present it to our HR.
Thanks in advance,
Posted by Mario at April 20, 2010, 11:16 am