Lawmaker seeks tax-free overtime, night shift pay

MANILA, Philippines - Makati City Rep. Abigail Binay pushed yesterday for the passage of a measure that will free all night-shift differential and overtime pay received by salaried employees from income taxes.

Binay filed House Bills 2836 and 4682 where all overtime and graveyard shift wages shall be excluded from the computation of the gross taxable income of all workers, regardless of their hourly pay rate.

She said “the extra cash we put in the pockets of workers on account of the reprieve will simply be spent by them on taxable consumption anyway – whether they buy goods or services invariably subject to sales levies.”

Binay said at present, the overtime and third shift premiums of workers receiving more than the statutory minimum wage are slapped up to 32 percent in withholding taxes, depending on the employee’s tax bracket.

She said the country’s growing number of business process outsourcing staff, who provide high-value services to global firms without interruption regardless of time or day, stand to gain from the bills once enacted into law.