How to Compute Daily Rate Pay in the Philippines

How to Compute Salary Per Day in the Philippines

Computing an employee’s daily salary in the Philippines requires a clear grasp of labor laws, company policies, and various salary computation methods. Accurate payroll calculation ensures compliance with regulations and proper worker compensation for full-time, part-time, or contractual employees. This guide provides a structured approach to computing the daily rate pay in the Philippines.

Basic Salary Computation for Monthly-Paid Employees

For employees who receive a fixed monthly salary, computing the daily rate involves breaking the total monthly earnings into daily wages. The computation method typically depends on the standard number of workdays per month.

• Common Formula: Monthly Salary / Number of Working Days in a Month
• Example: If an employee earns PHP 30,000 per month and works 22 days per month:
  • PHP 30,000 / 22 = PHP 1,363.64 per day
• Considerations:
  • Depending on their payroll system, some companies use 26, 22, or 20 workdays.
  • Companies following the Labor Code’s divisor (e.g., 313 for daily-paid employees) may have different computations.

H2: Daily Rate Computation for Hourly and Daily-Paid Workers

Employees paid by the day or hour require a slightly different computation method.

• Daily Rate Computation:
  • Basic Daily Rate = Agreed Daily Wage
• Hourly Rate Calculation:
  • Hourly Rate = Daily Rate / Number of Work Hours per Day
• Example:
  • If a worker is paid PHP 600 per day and works 8 hours:
    • PHP 600 / 8 = PHP 75 per hour
• Considerations:
  • Overtime pay, holiday premiums, and special pay may apply.
  • Government-mandated benefits must still be factored in.

Methods for Computing Daily Pay with Benefits and Deductions

Calculating daily salary also involves adding benefits and deducting mandatory contributions.

• Standard Payroll Deductions:
  • Social Security System (SSS)
  • Philippine Health Insurance Corporation (PhilHealth)
  • Home Development Mutual Fund (Pag-IBIG)
  • Withholding Tax
• The formula for Net Daily Wage:
  • Net Daily Wage = (Gross Monthly Salary – Deductions) / Number of Workdays
• Example Calculation:
  • Gross Salary: PHP 20,000
  • Deductions: PHP 3,500
  • Workdays: 22
  • (PHP 20,000 – PHP 3,500) / 22 = PHP 750 per day
• Considerations:
  • Additional allowances and company-specific benefits impact the final daily pay.

Daily Salary Computation for Overtime, Holiday Pay, and Night Differentials

Computing pay adjustments due to overtime, holidays, or night shifts follow prescribed rates under labor laws.

• Overtime Pay Calculation:
  • Overtime Rate = Hourly Rate × 1.25
• Holiday Pay Computation:
  • Regular Holiday = Daily Rate × 200%
  • Special Non-Working Holiday = Daily Rate × 130%
• Night Differential Computation:
  • Night Shift Premium = Hourly Rate × 1.10
• Example:
  • If an employee’s hourly rate is PHP 100:
    • Overtime Pay: PHP 100 × 1.25 = PHP 125 per hour
    • Regular Holiday Pay: PHP 1,000 × 200% = PHP 2,000
    • Night Shift Pay: PHP 100 × 1.10 = PHP 110 per hour
• Considerations:
  • The computation may vary based on company policies and specific labor agreements.

Daily Wage Calculation for Contractual and Freelance Workers

Contractual and freelance workers often negotiate pay per project, hour, or day, requiring flexible salary computation methods.

• Common Computation Methods:
  • Per-Project Rate: Agreed Amount / Estimated Workdays
  • Hourly Rate for Freelancers: Agreed Project Fee / Estimated Hours
• Example:
  • If a freelancer agrees to PHP 50,000 for a 25-day project:
    • PHP 50,000 / 25 = PHP 2,000 per day
• Considerations:
  • Freelancers and contractual workers must ensure clear payment terms.
  • Taxes and government contributions depend on self-employment regulations.

Why Seek Professional Assistance for Payroll Computation

Payroll computation involves factors such as labor law compliance, taxation, and benefits processing, which can make the process complex. Businesses must ensure accuracy to avoid penalties and ensure fair employee compensation.

Triple i Consulting provides expert payroll computation services to help businesses navigate the complexities of salary calculation. Our experienced team ensures businesses comply with labor laws while optimizing payroll processes efficiently.

Final Insights

Computing salary per day requires careful attention to salary structures, benefits, and deductions. Businesses must apply accurate payroll calculation methods for monthly-paid employees, daily wage earners, or freelancers.

Do You Need Help With Payroll?

Accurate computation of daily rate pay is crucial for ensuring fair and transparent compensation for employees in the Philippines. By understanding the concepts of daily and monthly rates and following the calculation methods explained in this article, employers can accurately determine employees’ daily rate pay, including special and regular holidays, 13th-month pay, and differences between 5-day and 6-day workers. Additionally, employers must consider the applicable withholding tax based on the employee’s income and tax bracket to ensure proper taxation compliance.

At Triple i Consulting, we take pride in our distinction as the pioneering company in the Philippines to achieve ISO 9001:2008 certification. We specialize in offering comprehensive business registration services and a wide range of business support consulting solutions. With our extensive experience and expertise in Accounting and Payroll Outsourcing, we are fully dedicated to providing unwavering support throughout the entire process.

Our team of highly skilled payroll experts is ready to provide dedicated assistance every step of the way. To schedule a free initial consultation with one of our payroll experts, please reach out to us using any of the following channels:

• Contact Us Here
• Fill out the form below
• Call us at: +63 (02) 8540-9623
• Send an email to: info@tripleiconsulting.com

Leave the intricacies to us while you focus on achieving your core objectives.