## NIGHT-SHIFT DIFFERENTIAL (NSD)

Working in the night has become a normal workday schedule for some companies especially, those in the BPO or Business Process Outsourcing nature. In the Philippines, working in the night between 10PM to 6AM, comes with additional compensation, and it’s called Night Shift Differential or NSD.

Read: How to compute your 13th month pay

Article 86 of Philippine Labor Code states, â€śEvery employee shall be paid a night shift differential of not less than ten percent (10%) of his regular wage for each hour of work performed between ten oâ€™clock in the evening and six oâ€™clock in the morning.â€ť It shall be noted that night shift differential shall be applied for every work done, whether such work is part or not part of the workerâ€™s regular shift. The covered period of night shift differential is the work performed between 10PM until 6AM of the following day.

The simplest formula to compute the night shift differential is:

**NSD = (Hourly rate * 10%) * number of hours worked from 10PM to 6AM**

It is to be emphasized that the Labor Code only provides the minimum required payments. The employer or the union may have higher premium through an agreement. It should be however, stated in the CBA the percentage of agreed premium that has to be followed by the company.

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##### LIMITATION OF NIGHT-SHIFT DIFFERENTIAL

Artile 82 of Labor Code state who are the employees not covered by this provision. In the case of night shift differential, it shall apply to all employees except the following:

- Those of the government and any of its political subdivisions, including government-owned and/or controlled corporations;
- Those of retail and service establishments regularly employing not more than five (5) workers;
- Domestic helpers and persons in the personal service of another;
- Managerial employees as defined in the Labor Code; and
- Field personnel and other employees whose time and performance is unsupervised by the employer including those who are engaged on task or contract basis, purely commission basis, or those who are paid a fixed amount for performing work irrespective of the time consumed in the performance thereof

##### NIGHT SHIFT DIFFERENTIAL ON TOP OF OVERTIME RATE, REST DAY/HOLIDAY RATE AND REGULAR HOLIDAY RATE

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*On Overtime Rate During Regular Working Day*

If an employee is required to work for overtime after the regular working hours, where its overtime schedule reached the night shift differential period, the employee shall receive the additional (*not less than*) ten percent (10%) of its overtime hourly rate, for work done between 10PM to 6AM.

Thus, when an employee is required to extend his work after his regular working time, he is entitled for his regular hourly rate and an additional twenty-five percent (25%) as his overtime rate plus ten percent (10%) for every work performed between the covered period.

The simplest formula to compute the night shift differential on overtime work is

**NSD = {(Hourly rate * 25%) * 10%} * number of hours worked**

*On Rest Day*

There are instances that an employee may be required to work on his rest days or during special holiday. The Labor Code states, â€śan employee who is required or permitted to work on the period covered during rest days and/or special holidays not falling on a regular holidays, shall be paid a compensation equivalent to his regular wage with plus at least thirty percent (30%) and an additional amount of not less than ten percent (10%) of such premium pay rate for each hour work performedâ€ť. Take note that our period covered in this subject is the work performed from 10PM until 6AM only.

Thus, the simplest formula to compute the night shift differential on work performed during rest day and/or special holiday is

**NSD = {(Hourly rate * 30%) * 10%} * number of hours worked**

*On Regular Holiday*

Working on a regular holiday in a BPO setting has become a normal duty since most BPO follows the calendar of their clients located in different countries. As stated in Noted in the Labor Code, â€śholiday pay is a dayâ€™s pay given by law to an employee even if he does not work on a regular holidayâ€ť. However, for this article, we will treat the employee as working on a regular holiday.

The Implementing Rules of the Labor Code state, â€śany employee who is permitted or suffered to work on a regular holiday, not exceeding eight (8) hours, shall be paid at least two hundred percent (200%) of his regular wageâ€ť. For any regular work performed during the night shift differential covered period, the employee shall be entitled to two hundred percent (200%) of his regular wage and an additional amount of not less than ten percent (10%) of each hourâ€™s work performed.

The simplest formula to compute the night shift differential on work performed during regular holiday is

**NSD = {(Hourly rate * 200%) * 10%} * number of hours worked.**

It should be noted that regular holiday rate starts at 12 midnight until 11:59 in the evening of the same date. Hence, the premium pay for work performed between 10PM until 11:59PM is different from the premium pay for work performed between 12midnight until 6AM on the following day, if such following day is a regular working day. Since the law requires a higher premium pay during the regular holiday, the work performed during the first 2-hours may be paid higher than the work performed on the next 6-hours, if the regular working shift is from 10PM to 6AM.

In this case, the night shift differential may have two different computations, such as

For the first 2 hours,

**NSD _{1} = {(Hourly rate * 200%) * 10) * 2 hours**

For the next 6 hours,

**NSD _{2} = (Hourly rate * 10) * 6 hours**

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##### NIGHT SHIFT DIFFERENTIAL TABLE MATRIX

For you to easily understand the concept of night shift differential, it is best to put on an illustration table. Although night shift differential may be compensated as premium pay or together with overtime pay, it shall be noted that amount may differ according to the type of days or the nature of the work performed, whether regular or overtime. The Implementing Rules have shown that night shift differential may be rendered either during the regular work hours or overtime work hours of the employee.

As provided by the Labor Code, the table below shows the rate of night work pay and other compensation for certain days of work. For the matter of illustration, we are using the NCR Minimum Wage (WO No. NCR-14) as reference.

*** Source of this article are the Philippine Labor Code and book entitled â€śGuide on Employee Compensation and Benefits, Volume Oneâ€ť of Atty. Elvin Villanueva. This article is made for people who have limited information on night shift differential computation. You may review the article and provide insights or may give feedback for any inappropriate information through [email protected].

Hi,

Would like to check if you work on Friday 10pm t0 Saturday 7am, since there is a Saturday involved does it fall down under “Rest Day (RD)” computation?

Is Saturday your RD? If Yes, then night differential and work on rest day premium applies

Hi! Seeking for clarifications please.

We have an employee working on a night shift (930pm – 630am).

How does the holiday/premium pay should be computed or do we have any rules to apply? DOLE release a general rules only for the computation of holiday pay.

Should we pay him full 200% since he completed 8hrs worked, or only 2.5hrs (9:30pm-12mn) shall we pay since it falls on the date of a holiday and the rest of his work schedule falls on a regular day.

This is the only reference I have release by DOLE: http://ro6.dole.gov.ph/default.php?retsamlakygee=239&resource=df22f17124884fc51f1ac69d610096ac

Is the computation still applicable to date or not?

how do you treat/count this workday? 2 calendar days or one calendar day?

My work starts at 7pm until 4am. Does it mean I am entitled to night differential rate?

only the coverage time

What if my time is 7pm to 4am. Am I entitled to night differential rate?

only the covered period

if an employees has a 10pm – 7am schedule (9 hour shift) and has a 1 hour break in between, will he still get whole 6 hour Night differential pay?

the non compensable break is not included.

What is the rate for Night differential OT in legal holiday + special holiday + restday ?

Thank you for the very informative article.

I was a bit confused. I work at a Architectural firm. may regular working hour is from 9am to 6pm. I often reach 2am – 4am. How much would my overtime pay and NSD be? Example my daily rate is 800 pesos. Thank you in advance.

OT starts after 6PM, ND starts at 10pm (plus OT)

For example mam may rate for a day is 285 . Then I work on 10 pm to 8 am then how much is the night diff within that time ??

Hi Ej,

To help you with your inquiry, I have some clarifications. The 10pm-8am is a 10-hr straight duty. With this working schedule, please answer the following:

1) Do you have 1-hour meal break period?

2) Does this schedule have an overtime period? If yes, what is your overtime schedule?

Hi ,

can you please help me to compute my daily duties from 6pm to 6am. how much my salary per day..please specify the computation. thanks..

HI Chique,

Initially, you must compute for your first 8-hours regular duties. You may follow this steps:

1. Compute for your hourly rate with this formula:

Hourly Rate = Daily Rate divide by 8hrs

2. Compute for the regular rate of your regular schedule which is the 6pm to 10 pm comprising 4 hours of duty. You may use this formula:

Regular Duty Rate = Hourly Rate multiply by 4 hours

3. Compute for the regular rate with NSD for the remaining schedule which is 10pm to 3am (assuming you have 1-hour break), comprising another 4 hours of duty. You may use this formula:

Regular Duty With NSD Rate = (Hourly Rate * 10%) multiply by 4 hours

4. It is assumed that your remaining schedule, 3am to 6am comprising 3 hours, is already an overtime work on a regular schedule. For this computation, please use this formula:

Regular Overtime with NSD Rate = {(Hourly Rate * 10%) * 125%} multiply by 3 hours

I hope this helps.

Thanks Dina for responding to Chique’s Q, and a detailed one. Cheers!

Thanks Dina for responding to Chiqueâ€™s Q, and a detailed one. Cheers!

You’re welcome sir Sonnie. Glad to be of help.

hi, my employer is saying that charging full 8 hours of night diff is against the labor code. They say that there should be at least 1 hour rest period in between 10 pm to 6 am but i cannot find any reference on this. is this true?

For every 8 hours of work, regardless of shift, should have a 1 hour “non compensable” break. That’s why for the regular shift, they have an hour lunch break. The same is true for the graveyard shift.

When I talk about shift, I mean full 8 hour work (paid) + one hour non compensable break.

this is really informative Sir Sonnie… I used to have thse NDs when I was working in a BPO company… call center agents are mostly the one who can use this ND as great advantage.. Personally, i love it when I was assigned on a shift that will cover that 10PM to 6Am frame…. Every employee should be aware about this so that they know if they are getting the right salary or not.

It is very good that the government has something to say when it comes to paying night shifts. I remember I used to do the night shift for about a month at a company I used to work, to train the new employees. It had such a big impact on my body, I used to drink energy drinks but still almost fall asleep. It is a much harder job to work by night and it should be compensated with even more than just 10%.

I used to work to a local company before and I am not really good at computing my NDR. hahhaa But this is really informative. These days, it is really essential for people to know how their salary is being computed. In this way, we get to receive the payment we have worked hard for.

Wow I know that people work overtime but I didn’t think people worked regularly at such anti-social hours. Not sure I could do it myself but I guess the pay is better!