Bill seeks tax-free night shift differential pay

Makati City Representative Luis Campos Jr. has introduced House Bill No. 10534, proposing to exempt night shift differential pay from income taxes.

The bill aims to ensure that employees working from 10 p.m. to 6 a.m. can fully benefit from their additional compensation.

“Our bill seeks to further augment the take-home pay of workers and help them cope with the soaring cost of living,” Campos stated on Sunday.

He emphasized that the bill aligns with the constitutional mandate to provide full protection to labor, promote workers’ welfare, and assure them a rising standard of living.

Currently, the Labor Code mandates employers to pay an extra 10 percent of an employee’s hourly rate for work done between 10 p.m. and 6 a.m.

However, this night shift differential is still subject to income tax, particularly for employees earning over P250,000 annually.

If enacted, the bill would significantly benefit the estimated 1.7 million workers in the business process outsourcing (BPO) sector, who predominantly work during the night.

It would also aid employees in 24-hour establishments like hospitals, convenience stores, fast-food chains, and export companies.

The proposed legislation seeks to amend the National Internal Revenue Code, adding the night shift differential pay to the list of non-taxable income items, thereby easing the financial burden on night shift workers across various industries.