Overtime Pay Philippines: 2026 Rates and Computation for Cafés

By Robin Salvador, co-founder, Caffeine Brothers
Last updated: November 6, 2026

Quick answer: Overtime pay in the Philippines is at least 125% of the hourly rate for each hour worked beyond 8 on an ordinary day, under Article 87 of the Labor Code. On rest days, special days and holidays, overtime is the rate for that day plus 30%. At the Metro Manila minimum of ₱755 a day (Wage Order NCR-28, effective Sept 26, 2026), one ordinary overtime hour is ₱117.97, a rest-day or special-day overtime hour is ₱159.49, and a regular-holiday overtime hour is ₱245.38.

Christmas is the busiest stretch for many cafés, kiosks and office pantries, and it is also when overtime adds up fastest. This guide uses the Labor Code, its Omnibus Rules and DOLE’s 2023 Handbook on Workers’ Statutory Monetary Benefits to show how to compute overtime at the new NCR minimum wage. It pairs with our guides to holiday pay and night shift differential.

What does the Labor Code say about overtime?

Article 83 sets normal hours at no more than eight a day. Article 87 then says work may go beyond eight hours if the employee is paid “his regular wage plus at least twenty-five percent (25%) thereof.” For work beyond eight hours on a holiday or rest day, the extra pay is the rate for the first eight hours on that day plus at least 30%.

Three related rules matter in practice. Article 84 counts as hours worked all time an employee is required to be on duty or at a prescribed workplace, and all time the employee is “suffered or permitted to work.” Article 88 bars offsetting undertime with overtime. Article 90 says the “regular wage” used for overtime is the cash wage only, “without deduction on account of facilities provided by the employer,” such as meals or lodging.

Who is entitled to overtime pay?

DOLE’s handbook says overtime pay covers the same employees as premium pay. That means all employees except government employees; managerial employees and officers or members of a managerial staff who meet the handbook’s tests; kasambahay and persons in the personal service of another; workers paid by results, such as piece rate or pakyaw, where output rates meet DOLE standards; and field personnel whose hours cannot be determined with reasonable certainty. Article 82 also excludes dependent family members of the employer.

For a café, this usually means baristas, cashiers, kitchen crew and service staff are covered. A store manager may fall outside the rules only if the job meets all the handbook’s conditions, including directing two or more employees and having real say in hiring and firing. A job title alone is not enough.

One difference from holiday pay is worth noting. The handbook’s holiday pay rule excludes retail and service establishments regularly employing fewer than ten workers, but its premium pay and overtime coverage lists do not. Read together, the lists put a small café outside the regular-holiday 200% rule while its staff stay covered by Article 87’s overtime premium.

How do you compute overtime pay?

Start with the hourly rate, which is the daily wage divided by 8. Then multiply by the rate for the type of day. DOLE’s handbook gives a full table of multipliers. The overtime rows are below, with peso amounts we computed at the two NCR minimum wage rates in force since Sept 26, 2026: ₱755 for non-agriculture and ₱718 for agriculture, retail and service establishments with 15 workers or fewer, and small manufacturers with fewer than 10 workers.

The handbook explains why rest-day overtime is 169% and not 155%. The 30% overtime premium is applied to the rest-day rate of 130%, not added to the basic 100%. In its words, premium pay “is included as part of the regular rate” when computing overtime on those days, especially if the employer pays only the legal minimum. Employers and workers may agree on higher overtime rates in a collective agreement.

Worked examples for December 2026

Proclamation No. 1006 sets December 24 (Thursday) and December 31 (Thursday) as special non-working days, and December 25 (Friday) and December 30 (Wednesday) as regular holidays. The examples below assume a crew member works 10 hours on each day, which is 8 regular hours plus 2 overtime hours, and that none of these days is the worker’s rest day.

Across the four December holidays, the ₱755 worker earns ₱6,602.48 for 40 hours, of which ₱1,619.48 is overtime pay. Four ordinary 10-hour days would pay ₱3,963.75.

For a small café with fewer than ten workers, DOLE’s handbook marks the regular-holiday rows “not covered” for retail and service establishments, and it does not give a separate overtime figure for that case. Article 87’s 25% premium for hours beyond eight still applies, so check the rate with DOLE before you run December payroll.

Can undertime be offset by overtime?

No. Article 88 says “undertime work on any particular day shall not be offset by overtime work on any other day,” and that letting the employee go on leave on another day does not remove the overtime premium. Here is the difference at ₱755. A barista arrives an hour late on Monday and works 7 hours, then stays an hour late on Tuesday for 9 hours. Monday pays ₱660.63 and Tuesday pays ₱755 plus one overtime hour of ₱117.97, or ₱872.97. The two days total ₱1,533.59. Treating the days as two plain 8-hour days would pay ₱1,510.00, which is ₱23.59 short.

When can an employer require overtime?

Article 89 and Section 10 of the Omnibus Rules list the cases where an employer may require overtime, with pay. They are a declared war or national or local emergency; preventing loss of life or property during an actual or impending emergency such as a fire, flood, typhoon or epidemic; urgent work on machines or equipment to avoid serious loss; preventing loss or damage to perishable goods; finishing work started before the eighth hour to avoid serious obstruction of the business; and using favorable weather where the quality of the work depends on it. The rules add that in other cases “no employee may be made to work beyond eight hours a day against his will.”

For a café, the perishable goods case is the one most likely to come up, for example finishing a delivery of fresh milk or baked goods. A long queue on a busy Saturday is not on the list, so overtime for that should be agreed with the staff.

A five-step overtime check for café payroll

1. Record actual hours. Keep time records that show start, end and meal breaks for every shift. Short coffee breaks count as hours worked.
2. Classify each day. Mark ordinary days, rest days, special days and regular holidays before you compute anything. Use Proclamation No. 1006 for 2026 dates.
3. Compute the hourly rate from the cash wage. Divide the daily wage by 8 and do not deduct meals or other facilities (Article 90).
4. Apply the right multiplier per hour. Use 125% for ordinary days, 169% for rest or special days and 260% for regular holidays, and add 10% night shift differential for hours between 10 p.m. and 6 a.m.
5. Keep payslips for at least three years. Article 306 gives workers three years to file money claims, so records from 2026 can still be questioned in 2029.

What overtime costs compared with coffee

Overtime adds up quickly. A crew member at ₱755 who works 2 overtime hours on 10 ordinary days in a month earns ₱2,359.38 in overtime pay (₱2,243.75 at ₱718). For comparison, the coffee in a 10 g cup made from our Robusta 10 kg box (₱7,730 on Nov 6, 2026) costs ₱7.73, so one ordinary overtime hour costs about the same as the beans for 15 cups. If you are planning holiday staffing, our barista salary guide and 13th month pay computation cover the other payroll costs.

This article is general information based on the sources listed below. It is not legal advice. For a specific case, ask DOLE or a labor lawyer.

Frequently asked questions

Sources

1. Labor Code of the Philippines, Book Three (Articles 82 to 90). Labor Law PH library, modified Apr 2, 2024. Coverage, normal hours, hours worked, overtime, undertime, emergency overtime, regular wage
2. Omnibus Rules Implementing the Labor Code, Book III, Rule I. Labor Law PH library, modified Oct 9, 2023. Sections 8 to 10 on overtime and compulsory overtime
3. 2023 Handbook on Workers’ Statutory Monetary Benefits. DOLE Bureau of Working Conditions, 2023. Coverage lists, overtime rates, stipulated rates, guide computations table
4. Labor Code of the Philippines, Book Seven (Article 306). Labor Law PH library, modified Oct 9, 2023. Three-year period for money claims
5. DOLE: P60 wage hike in NCR takes effect Sept. 26. GMA News, Sept 26, 2026. ₱755 and ₱718 NCR minimum wages under Wage Order NCR-28
6. Proclamation No. 1006, s. 2025. LawPhil. 2026 regular holidays and special days

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