Night Differential or Night Shift Differential (NSD) is an additional compensation provided to workers who worked during the night. This additional pay is also commonly known as Night Differential Pay or Night Shift Differential Pay.

This article will provide you with information on Night Differential entitlement; rate and examples on how to compute it with overtime and on holidays.

Who is entitled to night differential pay?

According to the Labor Code of the Philippines, all employees are entitled to night differential pay except government personnel; employees of retail and service establishments with not more than 5 employees; domestic helpers; managerial employees; and, those employees whose time and performance are unsupervised.

When is the night shift differential hours?

It starts from 10 p.m. to 6 a.m the following day.

What is the night differential rate?

Unless the company provides a higher night differential rate, the rate shall be 10%. This means that for every hour of work, the employee shall be paid a total 110% of his regular hourly wage. If the employee regular hourly wage is P50, then with night differential, his hourly wage shall become P55.

Computation of Night Differential

Example 1: How to compute Overtime Pay with Night Differential
Regular Hourly Wage: P50
Overtime Rate: 25%
Night Differential Rate: 10%
Actual Hourly Rate: 125% × 110% = 137.5%
Actual Hourly Wage: P50 × 137.5% = P68.75
Example 2: How to compute Night Differential on Special Non-Working Day
Regular Hourly Wage: P50
Special Holiday Rate: 30%
Night Differential Rate: 10%
Actual Hourly Rate: 130% × 110% = 143%
Actual Hourly Wage: P50 × 143% = P71.50
Example 3: How to compute Night Differential on Regular Holiday
Regular Hourly Wage: P50
Regular Holiday Rate: 100% (additional)
Night Differential Rate: 10%
Actual Hourly Rate: 200% × 110% = 220%
Actual Hourly Wage: P50 × 220% = P110

For more information on labor regulations, please refer to Presidential Decree No. 442, s. 1974.