How to compute a daily rate and an hourly rate in the Philippines is the step most overtime and absence errors skip. The 2024 handbook can say 125% or 200%; those percentages still need a peso base. That base is not a single nationwide divisor. It is the conversion method your company actually documents, applied to the employee’s pay type and schedule.
This article was last reviewed in September 2026. Factors such as 365, 313, 261, 26, and 22 appear in practice. They are not universally required. Actual payroll depends on company policy, employee classification, the contract or CBA, the work schedule, and current government rules. Handbook editions can change.
TimeBoxHR is designed to support configurable payroll rules so the factor you chose is stored and reused for absences, overtime, and holiday conversion, instead of being retyped differently in each spreadsheet.
Why payroll converts at all
Monthly salary is a convenient offer-letter number. Cutoff work is done in days and hours: one unpaid absence, two hours of overtime, three hours after 10:00 p.m., eight hours on a regular holiday.
Conversion gives you:
- A daily rate for absence, leave without pay, and many holiday lines
- An hourly rate for overtime, night differential, and minute-level tardiness or undertime
Monthly-paid versus daily-paid decides whether basic pay is a monthly block or a sum of days. This article is the arithmetic after that choice. Daily-paid employees already have a daily rate; they still need an hourly rate for premiums.
A DTR system that reports hours without a stored daily and hourly rate forces payroll to invent the divisor under time pressure. That is how ÷ 30 appears.
Daily rate from a monthly salary
Pick the documented method. Then apply it to the same monthly basic you use for the period (usually the stated monthly salary, not a net figure).
Formulas you will see in practice—again, not a required set:
- Daily rate = (monthly basic × 12) ÷ 365
- Daily rate = (monthly basic × 12) ÷ 313
- Daily rate = (monthly basic × 12) ÷ 261
- Daily rate = monthly basic ÷ 26
- Daily rate = monthly basic ÷ 22
365 treats the year as every calendar day, which is why teams use it when monthly pay is meant to cover rest days and regular holidays. 313 is often described as 365 minus 52 Sundays. 261 is often described as a five-day-week year. 26 and 22 are monthly working-day style divisors. If the employee’s rest day is not Sunday, a Sunday-based 313 is the wrong story even when the peso looks familiar.
Hourly rate from a daily rate
For a standard eight-hour workday:
Hourly rate = daily rate ÷ 8
That is the figure the 2024 handbook percentages multiply. Ordinary overtime is 125% of this hourly rate; ordinary night overtime is 137.5%; rest-day overtime is 169%; regular-holiday overtime is 260%; night differential is at least 10% of the applicable hourly rate for hours from 10:00 p.m. to 6:00 a.m. See overtime pay and night differential.
If the scheduled full day is not eight hours, document the divisor that matches “a day’s work” for that role. A compressed workweek is a legal and scheduling arrangement, not a silent invitation to keep ÷ 8 while the DTR shows ten-hour days as regular.
Part-time roles need a second sentence in the policy: either the stated daily wage already is the short day, or the daily wage is an eight-hour equivalent and you pro-rate. Those two sentences produce different hourly rates.
Worked example: ₱30,000 under several factors
The table below is an illustration of arithmetic, not a recommendation. Use your documented factor.
| Documented method | Daily rate | Hourly rate (÷ 8) |
|---|---|---|
| (₱30,000 × 12) ÷ 365 | ₱986.30 | ₱123.29 |
| (₱30,000 × 12) ÷ 313 | ₱1,150.16 | ₱143.77 |
| (₱30,000 × 12) ÷ 261 | ₱1,379.31 | ₱172.41 |
| ₱30,000 ÷ 26 | ₱1,153.85 | ₱144.23 |
| ₱30,000 ÷ 22 | ₱1,363.64 | ₱170.46 |
| ₱30,000 ÷ 30 (not a documented method here) | ₱1,000.00 | ₱125.00 |
Two hours of ordinary overtime at 125%:
| Factor used for the hourly rate | 2 hours ordinary OT |
|---|---|
| 365 (₱123.29 × 125% × 2) | ₱308.23 |
| 22 (₱170.46 × 125% × 2) | ₱426.15 |
| Informal ÷ 30 (₱125 × 125% × 2) | ₱312.50 |
The employee who was hired at ₱30,000 will not understand why OT is ₱308 in January and ₱426 in February unless you changed the written method. One unpaid absence moves by hundreds of pesos across the same rows. That is why how to compute payroll locks the factor before it adds OT and holiday lines.
Rounding in this table uses centavos after the division. ₱30,000 ÷ 22 = ₱1,363.636… → ₱1,363.64. ₱1,363.64 ÷ 8 = ₱170.455 → ₱170.46. Write that rounding rule down and reuse it. Recomputing ₱30,000 ÷ 22 ÷ 8 in one cell as ₱170.4545 and in another as ₱170.45 will drift.
Daily-paid employees: hourly rate only
If the contract says ₱800 per day, you do not convert from monthly unless you are building a monthly equivalent for a report or a 13th-month estimate.
Hourly rate = ₱800 ÷ 8 = ₱100
That is the ₱100 used throughout the overtime, holiday, and night articles: ordinary OT ₱125 per hour; two hours = ₱250; rest-day OT ₱169 per hour; regular-holiday OT ₱260 per hour.
A monthly equivalent (₱800 × days paid in a typical month) is useful for comparing offers. It is not a reason to switch the person to a 365-day monthly construction at cutoff.
Using the hourly rate on premiums
Once the hourly rate exists, attach the day type from the DTR:
- Ordinary hour inside eight: already in daily or monthly basic (plus night 10% if in the window).
- Ordinary OT: hourly × 125%.
- Rest day first eight: daily × 130% (or the monthly-paid equivalent your policy uses).
- Rest-day OT: hourly × 169%.
- Special non-working: 130% / 169%, or 150% / 195% if also a rest day.
- Regular holiday: 200% / 260%, or 260% / 338% if also a rest day.
- Night: × 1.10 on the applicable hourly rate; ordinary night OT 137.5%.
Those percentages are the 2024 handbook equivalents. Editions can change. A special working day is typically treated as an ordinary working day for pay unless a proclamation or policy says otherwise.
Holiday pay and rest-day pay explain when the first eight hours are a daily-rate problem rather than an hourly-rate problem. Conversion still has to be done before either formula runs.
Simplify rate conversion with TimeBoxHR
TimeBoxHR is designed to support configurable payroll rules so the daily and hourly rates used for absence, overtime, night differential, and holiday premiums come from one stored method. Time still has to be captured through DTR scanning or geofenced mobile attendance; a perfect factor cannot repair a missing timeout.
Tardiness, undertime, and leave conversions
Minute-level deductions need the hourly rate (or an agreed minute rate = hourly ÷ 60). A 15-minute tardy at ₱170.46 per hour is ₱170.46 × (15 ÷ 60) = ₱42.62 if that is the written rule. Grace periods belong in the policy, not in the encoder’s discretion.
Leave without pay uses the daily rate for a full day, or the hourly rate for a partial day, according to the leave policy. Vacation leave and sick leave are usually company benefits. Service incentive leave is statutory subject to exceptions. How to calculate leave credits covers accruals; this article only supplies the peso attached to a deducted day.
Do not convert leave credits with 22 and deduct unpaid absences with 365.
What not to do
- Use ÷ 30 because the month has 30 days
- Use 365 for holiday pay and 22 for absences
- Recompute the hourly rate from net pay after deductions
- Take hourly = monthly ÷ 240 because “8 × 30” looks tidy
- Change the factor for one employee to make overtime cheaper
- Apply a Sunday-based 313 to a workforce that rests on Wednesday
- Publish four decimal daily rates on the payslip and two-decimal rates on the register
How timekeeping improves payroll still sits underneath: the rate is only applied to hours someone reviewed.
Records to keep next to the factor
Store, for each employee or each bargaining unit:
- Pay type (monthly-paid or daily-paid)
- Documented factor or stated daily rate
- Scheduled hours that define a full day
- Rounding rule
- Effective date of the method
- CBA clause if the factor is bargained
A payroll system for the Philippines should treat those fields as configuration, not as comments in an email. When you later compute SSS, PhilHealth, and Pag-IBIG, agency bases may use monthly compensation rather than your daily rate. That is a different conversion. Do not force SSS into daily rate ÷ 30.
How TimeBoxHR Handles This
TimeBoxHR keeps the time record—DTR scanning or geofenced mobile attendance—on the same path as leave approvals, holiday calendars (regular and special, by branch or location), and overtime requests with configurable statutory pay, including night differential and holiday premiums.
Configurable payroll rules are how a 365 construction and a 22 construction can coexist without rewriting Excel each cutoff. SSS, PhilHealth, and Pag-IBIG contribution tables are configurable and versioned; statutory reports for those agencies and the BIR are produced from the payroll run. TimeBoxHR is designed to support configurable payroll rules. It will not pick your divisor. You still have to write the method down and re-verify government schedules before you pay.