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How to Calculate Your Employee’s Daily Pay Rate

Updated: May 15, 2023

Calculating your employee's daily rate can seem like a daunting task, but with some simple steps you can quickly and easily work out the amount. Find out how to compute your employee’s daily rate here and find out the best way to pay your team for their hard work.

Factors affecting your daily pay rate.

Your daily rate may be affected by various factors such as your level of experience, the type of work you do, the industry you work in, and the location of your job. Let's take a closer look at each of these factors.

Level of Experience

Your level of experience can have a significant impact on your daily rate. Generally, more experienced professionals can command higher rates than those with less experience. This is because they have acquired a specialized set of skills and knowledge over time that is valuable to employers. Additionally, experienced professionals are often more efficient and can complete tasks more quickly, which can result in higher earnings.

Type of Work

The type of work you do can also affect your daily rate. Some jobs, such as those that require specialized skills or knowledge, may command higher rates than more general or entry-level positions. For example, a software developer with specialized skills in a particular programming language may earn a higher daily rate than a general IT support technician.


The industry you work in can also influence your daily rate. Certain industries, such as finance, law, or consulting, tend to pay higher rates than others. This is because these industries require specialized knowledge and expertise that is not as commonly available. Additionally, industries that are experiencing high demand for talent may offer higher rates to attract and retain skilled professionals.


Your location can also have an impact on your daily rate. In areas with a higher cost of living, such as large cities, daily rates may be higher to compensate for the increased expenses. Similarly, in areas where there is a shortage of skilled professionals, rates may be higher to attract talent.

By understanding these factors, you can better position yourself to negotiate higher rates and earn more for your skills and expertise.

Determine the daily pay rate.

Before you can figure out the daily rate of your employee, you must first determine if the employee is a monthly-paid employee or a daily-paid employee. This is usually specified in their contract of employment.

In reference to the 2022 Handbook on Workers' Statutory Monetary Benefits (, their difference has been defined wherein:

Monthly-paid employees” are those who are paid every day of the month, including unworked rest days, special days, and regular holidays.

For monthly-paid employees, you must know the factor days in a year the company uses and if it is applicable to all employees or otherwise. Factor days is the total working days in a year. Unless a more favorable company policy is being implemented, if an employee’s work schedule is from Mondays to Saturdays, factor 313 days is to be used. While if an employee’s work schedule is from Mondays to Fridays, factor 261 days is to be utilized.

Formula: (Monthly Basic Salary X 12 mos.) / Factor days in a year = Daily Rate

To illustrate:

(P30,000 X 12) / 313 = P1,150 Daily rate

(P30,000 X 12) / 261 = P1,379 Daily rate

“Daily-paid employees” are those who are paid on the days they actually worked and on unworked regular holidays.

Daily rate is usually pre-agreed upon, especially for daily-paid employee and must not be below the applicable statutory minimum wage.

Determine the hourly rate.

After you figured out the daily rate of your employee, you can now determine their hourly rate. Unless specified on the employment contract or a more favorable company policy is used, 8 hours per day is the divisor.

Formula: Daily Rate / 8 hours = Hourly Rate

Once you have established the daily and hourly rate, you can then work out on how much:

1. they will get paid each day

2. is the overtime pay

3. is the deduction in case late, undertime or absent

4. is the leave credit conversion to be paid, if any

Issue each employee with a pay slip.

A written record or pay slip is necessary to keep track of how much your employee earns and what deductions are applied. This ensures there are no misunderstandings or arguments between employer and employee at the end of each pay period. Make sure the pay slip includes any paid time off, their regular hours, overtime if applicable and any other relevant information. Pay slip should also be provided along with their wages each time they are paid.

Calculating your daily rate from your monthly salary is an essential skill that can help you budget your expenses or negotiate better pay rates. By using the simple formula we provided, you can easily calculate your daily rate in no time.

In AanyaHR, you will no longer have to worry about hourly and daily rates of your employees as these are automatically calculated. We have many computation options to select from which we continuously update with the latest rules. Pay slip is readily available which can be downloaded, viewed on mobile app, web or e-mailed to each employee.

Want to know more about other helpful and awesome features of AanyaHR, please send an email to or visit our website and book for a demo!

Source: DOLE

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