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While HR and payroll may have different functions, they are linked through their organization’s people. Payroll is responsible for making the payments and calculating the taxes that need to be withheld each month, while HR manage multiple processes related to an employee’s pay, such as salary increases, bonuses and incentives, vacation and leave days, and other similar elements.

When you think about these connection points, it reveals that in many ways HR and payroll are two sides of the same coin. However, what's often the reality in many organizations is that these two departments operate in their own silos – usually at the expense of the employee experience. Especially now, when employees are hyper-focused on how their organization supports them.

The effect of the HR and payroll teams becomes even more detrimental when we realize the relationship between both teams thrives when both departments recognize they share a common sense of purpose – which is to improve the employee experience instead of taking away from it.

Not everyone works an 8 am – 5 pm job. Some work mid-shifts, others night shifts.

This is where the night differential pay comes to fruition.

What is a night differential pay?

Night shift differential pay is an additional pay for work between 10:00 pm and 6:00 am the following day.

It is legally mandated in the country.

Do you sometimes wonder why call center agents have salaries higher than some employees?  One of the reasons is the night shift differential pay.   Under Philippine labor laws, an employee who works between 10 p.m to 6:00 a.m. should be paid a night shift differential of not less than ten percent (10%) of his regular wage.

However, the following employees are NOT entitled to the night shift differential pay:

1. Government employees

2. Those of retail and service establishments regularly employing not more than five (5) workers;

3.  Domestic helpers and persons in the personal service of another;

4. Managerial employees;

5.  Officers or members of a managerial staff; and

6.  Field personnel and other employees whose time and performance are unsupervised by the employer.

7.  Workers of companies duly registered as Barangay Micro Business Enterprises (BMBEs)

How to compute for the night differential pay you may ask?

Here’s how:

Refer to the table below on how to compute for the night differential pay on different occasions:

Daily rate / 8 hours = hourly rate

Example:

Daily rate: 643.68

Computing for the hourly rate:

643.68 / 8 = PHP 80.46 (hourly rate)

2. Computing the hourly rate with Night Shift Differential

PHP 80.46 (hourly) x 1.2 - PHP 96.552 (paid hourly rate by the company with NSD)

3. Computing for the Night Shift Differential

Computation: 96.552 - 80.46 = 16.097

NP x Total Number of Hours Worked

Example:

16.097 x 10 = 160.97