SHS

Business :

Mathematics
Quarter 4: Module 4

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 Target
Target

Now that you know about salary, wages, income, and

benefits, let us study overtime pay. Employee compensation refers to the
remuneration or reward that an employee gets from his or her employer for the
service he or she gives the latter. An employee, be it of a profit-making entity
(business) or non-profit organization, is paid something in return for his or her
services.

This module will provide you with information and activities that will help you
understand more about overtime pay.

After going through this learning material, you are expected to:

Identify the variables needed in the computation of

overtime pay.(ABM_BM11SW-IIe-8); and compute overtime pay
(ABM_BM11SW-IIe-9).

Learning Objectives:

1. Know the different overtime rates in different situations; 2. Identify

the variables needed in the computation of overtime pay;
3. Compute for overtime pay on:
a. Regular day
b. Special day
c. Rest day
d. Regular holiday
e. Rest day which falls on a regular holiday
f. Rest day which falls on a special day.

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 Lesson OVERTIME PAY

Jumpstart
Pre-test

Choose the letter of the best answer. Write your answer on a separate sheet.

1. Which of the following refers to the additional pay for work performed in excess
of 8 hours a day or 40 hours a week for jobs requiring 5 work days at 8 hours
per day?
A. Commission B. Overtime Pay C. Salary D. Wage
2. Which of the following is the rate of pay if you work on a regular holiday?
A. 130% B. 150% C. 200% D. 260%
3. Which of the following is the rate of pay if you work on a special day?
A. 130% B. 150% C. 200% D. 260%
4. Which of the following is the rate of pay if you work on a special day which is
also a scheduled rest day?
A. 130% B. 150% C. 200% D. 260%
5. Which of the following is the rate of pay if you work on a regular holiday which
is also a scheduled rest day?
A. 130% B. 150% C. 200% D. 260%

For items number 6-10 refer to the problem below:

Suppose your regular rate is 150/hr, how much will be your overtime pay on:
6. Ordinary day

A. ₱187.50 B. ₱195.00 C. ₱210.00 D. ₱390.00

7. Special day
A. ₱195.00 B. ₱225.00 C. ₱300.00 D. ₱390.00
8. Regular holiday
A. ₱195.00 B. ₱225.00 C. ₱300.00 D. ₱390.00
9. Special day which is also a scheduled rest day

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 A. ₱195.00 B. ₱225.00 C. ₱300.00 D. ₱390.00

10. Regular holiday which is also a scheduled rest day

A. ₱195.00 B. ₱225.00 C. ₱300.00 D. ₱390.00

Discover

A. Overtime Pay

Overtime pay refers to the additional pay for work performed in excess of 8
hours a day or 40 hours a week for jobs requiring 5 work days at 8 hours per day.

B. To compute for overtime pay, we need the following:

1. Hourly rate of the wage of the employee

2. Type of workday: ordinary day, special holiday, rest day or regular holiday
3. Number of hours of overtime

C. Overtime Rates

1. One hundred twenty-five percent (125%) of the hourly rate for work
performed in excess of 8 hours on an ordinary day.
2. One hundred thirty percent (130%) of the hourly rate for work performed in
excess of 8 hours on a rest day, special holiday or regular holiday.

Note: Work on a special holiday, a rest day or a regular holiday is paid a different
rate from an ordinary day work. The formulas on how to compute gross pay
for work done on these days are as follows:

a. A special holiday: 130% basic daily wage

b. A special holiday which is also a scheduled rest day: 150% basic daily
wage

c. A regular holiday: 200% basic daily wage

d. A regular holiday which is also a scheduled rest day: 260% basic daily
wage

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EXAMPLES:

On Ordinary Day

Myrna earns the regular daily rate of ₱340.00, if she works 10 hours on a regular
day, how much would be her total pay?

On an ordinary day, the overtime rate per hour is determined as follows:

• First, compute the hourly rate of the employee:

Regular hourly rate = Daily wage rate ÷ 8 hours

= ₱340.00 ÷ 8 hours

= ₱42.50 per hour

• Now, to determine overtime rate per hour:

Overtime rate = Regular hourly rate + 25% of Regular hourly rate

Overtime rate = ₱42.50 + (25% of ₱42.50)

= ₱42.50 + ₱10.625

= ₱53.125

• Total pay for the day = Regular pay + Overtime pay

= ₱340.00 + (₱53.125 × 2 hours)

= ₱446.25

On Rest Day and Special Day

Employees generally have their rest days, which may not fall on a Sunday. If an
employee is made to work on a Sunday, his or her rest day could be Monday or any
other day of the week to compensate for the Sunday that he or she worke. If an
employee is made to work on his or her rest day or on a special holiday like Maundy
Thursday or Good Friday, which dates are not fixed, the computation of his or her
pay would be as follows:

• Compute the hourly rate of the employee on a rest day or special day. The hourly
rate on rest day or special day is 130% of the regular rates:

Assuming that the minimum daily wage rate is ₱340.00.

Regular hourly rate = Daily wage rate ÷ 8 hours

= ₱340.00 ÷ 8 hours

= ₱42.50 per hour

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 Hourly rate = 130% of Regular hourly rate

= 130% × ₱42.50

= ₱55.25 per hour

• To determine overtime rate per hour:

Overtime rate = Hourly rate on rest day + 30% Hourly rate on rest day

= ₱55.25 + (30% × ₱55.25)

= ₱55.25 + ₱16.575

= ₱71.825

■ Marites earns regular daily rate of ₱340.00 giving her an hourly rate of ₱42.50. She
was requested by her boss to work on a Saturday, her rest day.

a. She worked 8 hours.

Total pay for the day = 8 hours × (₱42.50 × 130%)

= 8 × (₱55.25)

= ₱442.00

b. She worked for 10 hours.

Total pay for the day = [(8 hours × Hourly rate on rest day) + (2 hours
‘ × Hourly rate on rest day × 130%)]
= [(8 × ₱55.25) + (2 × ₱55.25 × 130%)
= ₱442.00 + (2 × ₱71.825)
= ₱442.00 + ₱143.65
= ₱585.65

On Rest Day which Falls on a Special Day

• Compute the hourly rate of the employee on a rest day which falls on a special day:

Assuming that the minimum daily wage rate is ₱340.00.

Hourly rate = 150% of Regular hourly rate

= 150% × ₱42.50

= ₱63.75

• To determine the overtime rate per hour:

Overtime rate = Hourly rate on rest day × 130% of Hourly rate on rest day

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 = ₱63.75 + (30% × ₱63.75)

= ₱63.75 + ₱19.125

= ₱82.875

■ Zenaida earns the regular daily rate of ₱340.00 giving her an hourly rate of ₱42.50.
She was requested by her boss to work on her rest day, which falls on Maundy
Thursday.

a. She worked for 8 hours. Her total pay for the day would be:

Total pay for the day = 8 hours × Regular hourly rate × 150%

=8 × (₱42.50 × 150%)

=8 × ₱63.75

= ₱510.00

b. She worked for 10 hours. Her total pay for the day would be:

Total pay for the day = [8 hours × (₱42.50 × 150%)] + {2 hours × [(₱42.50
‘ × 150%) × 130%]}

= (8 hr. × ₱63.75) + [2 hr. × (₱63.75 × 130%)

= ₱510 + (2 × ₱82.875)

= ₱510 + ₱165.75

= ₱675.75

On a Regular Holiday

• Compute the hourly rate of the employee on regular holiday:

Assuming that the minimum daily wage rate is ₱340.00.

Hourly rate = 200% of regular hourly rate

= 200% × ₱42.50 = ₱85.00

per hour

• To determine overtime rate per hour:

Overtime rate = Hourly rate on regular holiday + 30% of hourly rate on regular
‘ holiday

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 = ₱85.00 + (30% × ₱85.00)

= ₱85.00 + ₱25.50

= ₱110.50

■ Ester earns the regular daily rate of ₱340.00 giving her an hourly rate of ₱42.50.
She was requested by her boss to work on May 1, Labor Day.

a. She worked for 8 hours. Her total pay for the day would be:

Total pay for the day = 8 hours × 200% of regular hourly rate

=8 × (200% × ₱42.50)

=8 × ₱85.00

= ₱680.00

b. She worked for 10 hours. Her total pay for the day would be:

Total pay for the day = [(8 hrs × 200% of regular hourly rate) + {2 hrs ×
(200% of regular hourly rate × 130%)}]

= [(8 × ₱42.50 × 200%) + {2 × (₱42.50 × 200% ×

130%)}]

= (8 × ₱85.00) + (2 × ₱110.50)

= ₱680.00 + ₱221.00

= ₱901.00

On a Rest Day which Falls on a Regular Holiday

• Compute the hourly rate of the employee on a rest day which falls on a regular
holiday:

Assuming that the minimum daily wage rate is ₱340.00.

Hourly rate = 260% of regular hourly rate

= 260% × ₱42.50

= ₱110.50

• To determine overtime rate per hour:

Ovetime rate = Hourly rate on a rest day + 30% of hourly rate which falls on a
‘ regular holiday

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 = ₱110.50 + (30% × ₱110.50)

= ₱110.50 + ₱33.15

= ₱143.65

■ Teresita earns the regular daily rate of ₱340.00 giving her an hourly rate of ₱42.50.
She was requested by her boss to work on December 30, Rizal Day, which is a regular
holiday. However, Rizal Day fell on a Monday, which was Teresita’s rest day.

a. Teresita worked for 8 hours. Her total pay for the day would be:

Total pay for the day = 8 hours × Regular hourly rate × 260%

= 8 × ₱42.50 × 260%

= 8 × ₱110.50

= ₱884

b. She worked for 10 hours. Her total pay for the day would be:

Total ay for the day = [(8 hrs × regular hourly rate × 260%) + (2 hrs ×
‘ {regular hourly rate × 260%} × 130%)]

= (8 × ₱110.50) + (2 × ₱143.65)

= ₱884.00 + ₱287.30

= ₱1,171.30

Explore

A. FILL IN THE BLANKS. Complete the table by solving for the overtime
pay.
Regular Overtime Ordinary Rest day Rest Day Regular Rest Day
Rate per Hours Day and falls on Holiday falls on
day Special Special Regular
Day Day Holiday
1. ₱284.00 3 hours
2. ₱145.50 4 hours
3. ₱360.25 1 hour
4. ₱500.00 2 hours
5. ₱290.75 3 hours

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 B. COMPLETING THE TABLE. Complete the needed information in the table.
Regular rate Working Day Regular Overtime Gross
per hour hours Earnings Earnings Earnings
1. ₱28.00 9 hours Special day
2. ₱15.25 12 hours Regular Holiday
3. ₱33.80 10 hours Rest day
4. ₱45.25 8 hours Ordinary day
5. ₱26.13 15 hours Rest day falls on a
Regular holiday

Gauge

Directions: Solve for the following word problems. Write your answers on the space
provided.

1. Suppose an employee works 10 hours on a regular holiday; 8 hours on a

rest day and another 10 hours on an ordinary day, how much will the
employee be paid if his rate is PHP110/hour and he worked for 6 days
during the week and he only worked the required 8 hours for the 3 ordinary
days?

a. Basic pay for the 3 days with no overtime:

b. Basic pay plus overtime pay for the ordinary day with 2 hours overtime:

c. Basic pay on rest day:

d. Basic pay plus 2 hours overtime on a regular holiday:

e. Gross weekly pay

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