Monthly-paid and daily-paid employees in the Philippines can work in the same building and still need two different pay constructions. The distinction is not how often cash is released. It is whether basic pay is a monthly block that already contemplates unworked days, or a sum of days actually paid. Payroll that applies one holiday rule and one absence formula to both groups will mispay one of them every cutoff.
This article was last reviewed in September 2026 against well-established Labor Code and DOLE / BWC / NWPC 2024 Handbook on Workers’ Statutory Monetary Benefits principles. Handbook editions can change. The conversion factors mentioned below exist in practice; they are not a required national menu.
TimeBoxHR is designed to support configurable payroll rules so pay type, daily factor, holiday calendars, and DTR exceptions can be stored per employee instead of buried in a filename.
What monthly-paid usually means
In ordinary payroll language, a monthly-paid employee has a stated monthly salary. Depending on the documented factor, that salary may already include pay for unworked rest days and regular holidays. The employee still needs a DTR: overtime, night hours, worked holidays, unpaid absences, and tardiness do not disappear because the offer letter says ₱30,000 a month.
Typical consequences when the monthly factor is built to include rest days and regular holidays (a 365-day construction is the usual example):
- Unworked rest days do not generate a separate day’s pay
- An entitled unworked regular holiday often does not add another day’s basic on top of monthly salary
- An unpaid absence is deducted using the documented daily rate
- Worked rest days, worked holidays, overtime, and night differential are still additional earnings
Typical consequences when the company uses a working-day factor (22 or 26 appear often):
- Monthly basic is closer to pay for scheduled working days only
- Holiday and rest-day treatment must be spelled out, because those days are not automatically inside the ₱30,000 the way they are under 365
- Absence deductions still use that same documented daily rate
Neither paragraph is a legal requirement to use 365 or 22. Both are descriptions of what the arithmetic implies once you pick a factor. See how to compute daily and hourly rates.
What daily-paid usually means
A daily-paid employee has a stated daily wage. Pay for the period is generally:
- Days actually worked × daily rate
- Plus entitled unworked regular holiday pay
- Plus premiums when the employee works a rest day, special day, holiday, overtime, or night window
An unworked rest day is usually unpaid. An unworked special non-working day is usually unpaid unless policy, CBA, or practice says otherwise. That is the same special-day default described in holiday pay; daily-paid staff feel it immediately because there is no monthly block hiding the day.
Daily-paid employees can still be paid twice a month or once a month. Payment frequency does not convert them into monthly-paid. The HR file that says monthly because the bank file runs on the 30th is a classification error.
Why the distinction changes holiday and rest-day pay
The 2024 handbook percentages can be identical for both groups. What changes is whether basic pay already absorbed the day.
| Situation | Daily paid (typical) | Monthly paid on a 365 type factor (typical) |
|---|---|---|
| Unworked rest day | No day’s pay | Already inside monthly salary |
| Unworked regular holiday, entitled | 100% of daily rate as a day’s pay | Often already inside monthly salary |
| Worked regular holiday, first 8 hours | 200% of daily rate | Extra 100% commonly added so the day becomes 200% |
| Worked rest day, first 8 hours | 130% of daily rate | 130% (the unworked rest day was in monthly; working it adds the premium construction your policy uses) |
| Unworked special non-working day | Usually no pay | Usually no extra pay unless policy or practice grants it |
Worked-holiday overtime (260%), rest-day overtime (169%), special-plus-rest (150% / 195%), and regular-holiday-plus-rest (260% / 338%) are handbook stacks for hours actually worked. They apply to covered employees in either pay type. Details and peso examples are in overtime pay and rest-day pay.
A special working day is typically treated as an ordinary working day for pay unless a proclamation or policy says otherwise. That is true for both groups.
Common conversion factors—and why none is universal
These factors appear in Philippine payroll practice. They are not a legally required list. Do not adopt one because a blog table printed it.
| Factor | What teams often mean by it | What to watch |
|---|---|---|
| 365 | Monthly × 12 ÷ 365 | Includes rest days and regular holidays in the daily rate story |
| 313 | 365 minus 52 Sundays (illustration only) | Assumes a Sunday rest pattern that many shifts do not have |
| 261 | Roughly 365 minus Saturdays and Sundays | Aimed at five-day weeks; still an approximation |
| 26 | Monthly ÷ 26 | A working-day style monthly divisor; not a law |
| 22 | Monthly ÷ 22 | Another working-day style divisor for five-day plants |
313 and 261 assume a calendar shape that may not match a hospital, a BPO midweek rest, or a six-day shop. If the rest day is Wednesday, a Sunday-based 313 is the wrong story even if the peso looks familiar.
Actual payroll depends on company policy, employee classification, the contract or CBA, the work schedule, and current government rules.
Worked comparison on ₱30,000
Two employees, same plant, same month. Employee M is monthly-paid at ₱30,000 on a documented 365-day factor. Employee D is daily-paid. For a fair hourly comparison the company also publishes D’s daily rate as (₱30,000 × 12) ÷ 365 = ₱986.30, hourly ₱123.29. That pairing is an illustration so both people start from the same implied year. Many shops do not pair them this way.
Month facts: 22 scheduled workdays for the Monday–Friday crew, one unpaid absence for both, one entitled unworked regular holiday on a weekday, no overtime.
Employee M (365-type monthly):
| Component | Amount |
|---|---|
| Monthly basic | ₱30,000.00 |
| Unworked regular holiday | ₱0.00 extra (already in monthly) |
| Unpaid absence | (₱986.30) |
| Pay toward basic after absence | ₱29,013.70 |
Employee D (daily-paid, 21 days worked + 1 entitled unworked regular holiday; the absence is simply not a paid day):
| Component | Amount |
|---|---|
| 21 days worked × ₱986.30 | ₱20,712.30 |
| Unworked regular holiday 100% | ₱986.30 |
| Unpaid absence | ₱0.00 (day not paid) |
| Basic-related pay | ₱21,698.60 |
The gap is not a rounding bug. Daily-paid Employee D was never paid for rest days. Monthly-paid Employee M’s ₱30,000 was built to include them. If you “align” D to ₱30,000 minus one absence, you have quietly converted D to monthly-paid without a contract change.
If both work the regular holiday instead, the 2024 handbook first-eight-hours rate is 200%. Employee D is paid ₱986.30 × 200% = ₱1,972.60 for that date (instead of ₱986.30 unworked). Employee M, whose monthly already includes 100%, is commonly paid an additional ₱986.30 so the day becomes 200%. Same handbook idea; different add-on because basic already moved.
Absences, tardiness, undertime, and leave
Unpaid absence uses the documented daily rate. Inventing ÷ 30 because the month has 30 days produces a third rate that matches neither 365 nor 22.
Tardiness and undertime should be written. Some employers convert minutes to a fraction of the hourly rate; some use grace periods; some treat undertime as a leave deduction. Apply the same written rule to monthly-paid and daily-paid staff unless a CBA says otherwise. Do not forgive tardiness for monthly-paid employees and dock daily-paid employees for the same minutes.
Paid leave keeps the day in pay. Vacation leave and sick leave are usually company benefits, not universally mandated. Service incentive leave is statutory subject to exceptions. Leave credit calculation is a separate article; the payroll point is that an approved paid leave day is not an unpaid absence for either pay type. Leave requests should flow into the DTR so the holiday preceding-workday test can see them.
Simplify monthly and daily pay setup with TimeBoxHR
TimeBoxHR is designed to support configurable payroll rules so monthly-paid and daily-paid employees can carry different conversion methods in one cutoff. Holiday calendars, overtime, night differential, and leave approvals still attach to the same DTR. The software does not choose 365 versus 22 for you.
13th month and other benefits
13th-month pay is a statutory benefit with its own official definition of basic salary and coverage. Monthly-paid versus daily-paid affects how you accumulate the year’s basic, not whether the benefit exists. Do not assume a daily-paid employee is excluded because they are not “monthly.” Confirm current DOLE and handbook statements, and keep a year-to-date basic that matches how you actually paid, including the absence and holiday treatment you used.
Other benefits that refer to a month’s pay or a day’s pay inherit this article’s problem: you must know which day’s pay you mean.
Classification mistakes that show up at cutoff
- Daily-paid staff labeled monthly in the HRIS because they are paid on the 30th
- Monthly-paid staff computed as days worked × (monthly ÷ 22) and also given a full ₱30,000, which double counts
- A company-wide 313 factor while half the workforce rests on weekdays
- Applying the regular-holiday preceding-workday test, then paying daily-paid staff 100% on a special non-working day they did not work
- Assuming monthly-paid supervisors are exempt from overtime because of the pay type rather than duties
- Changing from 22 to 365 in January without restating contracts or explaining the new absence peso
How to compute payroll walks a full ₱30,000 month including SSS, PhilHealth, and Pag-IBIG. Statutory contributions generally follow agency compensation definitions, which may track monthly basic rather than pay type. Still, if daily-paid gross swings with days worked, the SSS monthly salary credit can move between months. Use the current SSS rules, not this paragraph, for the bracket.
Records both constructions need
Regardless of pay type, keep:
- The written factor or daily rate in the contract or payroll policy
- Schedule and rest-day assignment
- Holiday type by location
- Punches and approved corrections
- Leave approvals
- The register line that shows how basic was built that period
A payroll system for the Philippines should store pay type as a field. How timekeeping improves payroll still applies: the 365-day story does not repair a missing timeout.
How TimeBoxHR Handles This
TimeBoxHR keeps DTR scanning or geofenced mobile attendance, leave requests that flow into DTR and payroll, and holiday calendars that can differ by branch or location. Overtime requests can carry configurable statutory pay, including night differential and holiday premiums. Payroll rules are configurable, so a monthly-paid 365 construction and a daily-paid daily rate can coexist in one run.
SSS, PhilHealth, and Pag-IBIG tables are configurable and versioned; statutory reports for those agencies and the BIR sit with payroll. TimeBoxHR is designed to support configurable payroll rules. It will not declare an employee monthly-paid because the bank file is monthly. That decision stays with the employer and the contract.
