How to Compute Daily Pay Equivalent for Above-Minimum Monthly Paid Employee
Monthly-paid employees are those who are paid every day of the month, including unworked rest days, special days, and regular holidays. Factor 365 days in a year is used in determining the equivalent monthly salary of monthly-paid employees. (No. 1, D, DOLE Handbook on Worker’s Statutory Monetary Benefits, 2019 Edition)
Daily-paid employees are those who are paid on the days they actually worked and on unworked regular holidays. (Ibid.)
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Premium pay refers to the additional compensation for work performed within eight (8) hours on non-work days, such as rest days and special days. (Guide on Employee Compensation Volume 1 by Atty. Villanueva; See also No. 3, A, DOLE Handbook on Worker’s Statutory Monetary Benefits)
For instance, Mr. Coco Lamber is a monthly paid employee of the company Eng Prevencianow, Inc. receiving a salary of PhP20,000.00 per month. How should his daily pay be computed during regular holiday, special day, work on rest day, and work on said holidays falling on his rest day?
The initial step is to obtain the daily equivalent of his monthly pay. The dilemma usually is what number of days should be used to divide his monthly pay of PhP20,000.00 per month. Should this be divided by 21, 26 or 30 days?
The formula to use involves the use of a factor of 365 days. This means that the monthly salary should be divided by 12 months to get the one-year pay. Then the product is divided by the number of days in a year. Considering that a monthly paid employee is considered paid on all days of the year the factor is 365 days.
Thus:
Daily Equivalent = (PhP20,000 per month x 12 months) / 365 days
= PhP240,000.00 / 365 days
= PhP657.53
Pay on Normal Work Day
Daily Pay x 100%
PhP657.53 x 100%
PhP657.53
Special Day
Daily Pay x 130%
PhP657.53 x 130%
PhP854.79
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Rest Day
Daily Pay x 130%
PhP657.53 x 130%
PhP854.79
Special Day Falling on Rest Day
Daily Pay x 150%
PhP657.53 x 150%
PhP986.30
Regular Holiday
Daily Pay x 200%
PhP657.53 x 200%
PhP1,315.06
Regular Holiday Falling on Rest Day
Daily Pay x 260%
PhP657.53 x 260%
PhP1,709.58
The other instances when the daily equivalent of the monthly paid employee should be obtained is in computing the daily-based or hourly-based benefits such as overtime, night-shift differential, service incentive leave, de minimis benefits (Monetized VL), etc.
Hence, it pays to know the factor applicable, the formula and computation. Those who are inclined to watch the discussion than read the post, you can subscribe to my channel by copying the link below and pasting it on Youtube search bar then click open my channel “Atty. Elvin”.
Make sure to subscribe since I will be uploading several tutorial videos soon.
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