Holiday pay is a critical aspect of employment, ensuring that workers are fairly compensated for their time off during legal holidays. Whether you’re an employer or an employee, understanding how holiday pay works is essential for compliance with labor laws and maintaining a fair workplace. In this article, we will break down the steps to compute holiday pay, providing clarity on how it’s calculated and who qualifies for it.
What is Holiday Pay?
Holiday pay refers to the compensation employees receive for public holidays, even if they do not work on those days. In many countries, labor laws stipulate that employees are entitled to additional pay if they work during a holiday. This ensures that employees are compensated for the inconvenience of working when most are off.
Who is Eligible for Holiday Pay?
Not all workers in the Philippines qualify for holiday pay. You may be excluded from this government-mandated benefit if you fall under any of the following categories:
- Employees in retail or service companies with fewer than 10 regular staff members
- Managerial-level employees
- Officers and staff members who hold managerial positions
- Government workers
- Household helpers (kasambahays)
- Family members of the employer who rely on them for support
- Workers hired on a task, contract, or purely commission-based arrangement
Types of Holidays
Before calculating holiday pay, it’s important to know the two types of holidays:
- Regular Holidays: These are national holidays, such as New Year’s Day, Independence Day, and Christmas Day, where employees are generally entitled to 100% of their daily wage even if they do not work.
- Special (Non-Working) Holidays: These holidays, such as election days or cultural celebrations, usually do not come with pay if the employee doesn’t work, but those who work on these days are entitled to additional compensation.
Regular Holiday Pay Computation
According to Executive Order No. 292, as amended by Republic Act 9849, there are twelve (12) regular holidays observed each year. These include:
| New Year’s Day | January 1 |
| Maundy Thursday | Movable Date |
| Good Friday | Movable Date |
| Araw ng Kagitingan | Monday nearest April 9 |
| Labor Day | Monday nearest May 1 |
| Independence Day | Monday nearest June 12 |
| National Heroes’ Day | Last Monday of August |
| Eidl Fitr | Movable Date |
| Eidl Adha | Movable Date |
| Bonifacio Day | Monday nearest November 30 |
| Christmas Day | December 25 |
| Rizal Day | Monday nearest December 30 |
1. When the Employee Does Not Work on a Regular Holiday
- Formula:Â Holiday Pay = Daily Wage
2. When the Employee Works on a Regular Holiday
- For the first 8 hours:
- Formula: Holiday Pay = (Daily Wage + COLA) x 200%
- For overtime work (beyond 8 hours):
- Formula: Overtime Pay = (Hourly Rate × 200% × 130%) for each extra hour
Sample Calculation
Assuming an employee has a daily wage of ₱500:
- If they do not work on a holiday:
- Holiday Pay = ₱500
- If they work on a holiday:
- Holiday Pay = ₱500 × 2 = ₱1,000 for the first 8 hours
- If they work 2 hours of overtime:
- Overtime Pay = (₱500 × 2) / 8 × 2 = ₱250
- Total Holiday Pay = ₱1,000 + ₱250 = ₱1,250
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Special (Non-Working) Holiday Computation
| Chinese New Year | February 10 |
| Black Saturday | March 30 |
| Ninoy Aquino Day | August 23 |
| All Saints’ Day | November 1 |
| All Souls’ Day | November 2 |
| Feast of the Immaculate Conception of Mary | December 8 |
| Christmas Eve | December 24 |
| Last Day of the Year | December 31 |
1. If the Employee Does Not Work on a Special Non-Working Holiday
- Formula: Holiday Pay = ₱0 (unless specified otherwise in company policy)
2. If the Employee Works on a Special Non-Working Holiday
- Formula: Holiday Pay = Daily Wage x 130%
3. Overtime on a Special Non-Working Holiday
- Formula: Overtime Pay = (Hourly Rate x 130%) x 130% for each hour of overtime
Sample Calculation
Assuming the same employee has a daily wage of ₱500:
- If they do not work on a special holiday:
- Holiday Pay = ₱0
- If they work on a special holiday:
- Holiday Pay = ₱500 × 1.5 = ₱750 for the first 8 hours
- If they work 2 hours of overtime:
- Overtime Pay = (₱500 × 1.5) / 8 × 2 = ₱187.50
- Total Holiday Pay = ₱750 + ₱187.50 = ₱937.50
Important Considerations
- Non-Compliance Penalties: Employers must comply with the holiday pay laws to avoid penalties. The Department of Labor and Employment (DOLE) may impose fines and sanctions on businesses that fail to provide proper holiday compensation.
- Employment Contracts: Some employment contracts may provide more favorable terms regarding holiday pay than the minimum requirements set by law. Employers should always adhere to the terms outlined in contracts.
- Documentation: Maintain accurate records of employee attendance and wages paid on holidays to ensure compliance and facilitate audits.
Understanding how to compute holiday pay is crucial for ensuring compliance with Philippine labor laws and fair treatment of employees. By following the outlined formulas, both employers and employees can clearly understand their rights and responsibilities regarding holiday pay. Always consult with a legal expert or human resources professional for specific situations or additional clarification regarding labor laws.
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12 Responses
How to compute wages of the no work no pay employees if he works on regular holidays
Hi Janilyn! Thank you for reaching out to us. If an employee works on a regular holiday, he or she is entitled to receive double the salary for the first 8 hours of work. For any hours worked beyond 8, an additional 30% of the hourly rate should be paid. Should you require further consultation or assistance from our HR experts, please do not hesitate to contact us. You can reach us at our landline number, (02) 8478 5826, or on mobile at 0917 892 2337. Alternatively, you may email us at info@filepino.com. We would be more than happy to assist you.
Hello, what if a daily paid employee only rendered 6 hours of work during a Special Non working holiday. What will be the breakdown of his payment for his Basic pay and premium?
Hi Kate! Thank you for reaching out. If a daily-paid employee worked 6 hours on a Special Non-Working Holiday, he or she is entitled to the regular pay for the hours worked plus a 30% premium. For example, if the daily rate is PHP 600 (or PHP 75/hour), the total pay would be PHP 450 for 6 hours of work plus PHP 135 as the 30% premium, totaling PHP 585 for the day. Should you need further information or assistance, call us at (02) 8478 5826 (landline) and 0917 892 2337 (mobile) or send an email to info@filepino.com.
Thank you for this very informative blog. I’d like to know if an employee decided to work on a legal holiday for only 3 hours, what will be the break down of her salary if he/she is earning Php 500/day. Thank you.
Hi Rie! Thank you for reaching out. Under DOLE’s rules on regular holidays, an employee who works on a regular holiday is entitled to 200% of their daily rate for the first 8 hours. If they work less than 8 hours, the pay is pro-rated, but the 200% rate still applies to the hours worked.
Since the employee earns Php 500 per day, their hourly rate is Php 62.50 (Php 500 ÷ 8 hours). On a regular holiday, the pay rate is doubled, so the holiday hourly rate is Php 125.00. If the employee worked for 3 hours, the total holiday pay would be Php 125.00 × 3 hours = Php 375.00. However, take note that actual percentages may still vary depending on your company’s adopted factor rate (i.e., total number of working days in a year).
Hello, what if the Regular Holiday and the Special Holiday falls on the same day with 2 hrs of OT?
Hi Nez! Thank you for reaching out. Under DOLE regulations, if a regular holiday and a special (non-working) holiday fall on the same day, only the regular holiday pay rules will apply.
Copying the above computation of overtime for Regular Holiday, should the overtime pay be multiplied again by 1.3?
Sample Calculation
Assuming an employee has a daily wage of ₱500:
If they do not work on a holiday:
Holiday Pay = ₱500
If they work on a holiday:
Holiday Pay = ₱500 × 2 = ₱1,000 for the first 8 hours
If they work 2 hours of overtime:
Overtime Pay = (₱500 × 2) / 8 × 2 = ₱250
Total Holiday Pay = ₱1,000 + ₱250 = ₱1,250
Hi Gerald! Thank you for reaching out. As outlined in the article, overtime on a regular holiday is generally computed by multiplying the hourly rate by 200%, then by 130% for the overtime premium. However, the actual computation may vary depending on the daily factor rate your company uses (e.g., 261, 313, 365, or 392.5 working days per year), along with internal policies or collective agreements. We recommend checking with your HR department or a labor law expert to ensure accurate and compliant calculations.
Hello, how will be the computation for the night shift workers? Given that oct 30 is regular (8pm-11:59pm), and 12mn -5am (oct 31) special non working holiday. And then another working shift of oct 31 (8pm to 5am) to Nov 1 which is special non working holiday?
Hi Alisandra! Thank you for your inquiry. The computation for night shift work that falls on both regular days and holidays can get quite complex, as different pay rates apply depending on the exact hours worked. Based on DOLE regulations:
– Night Shift Differential (NSD): At least 10% of the regular hourly rate for work between 10 PM and 6 AM.
– Special Non-Working Holiday: Work done during this day is paid at 130% of the regular rate.
– When a shift crosses midnight, hours must be split by calendar day — applying the regular rate for regular days and the holiday rate (plus NSD, if applicable) for hours falling on the holiday.
In your example:
– Oct 30 (8 PM–11:59 PM) – regular pay; NSD applies only from 10 PM–11:59 PM.
– Oct 31 (12 MN–5 AM) – special non-working holiday; 130% + 10% NSD for each hour.
– Oct 31 (8 PM–5 AM, crossing to Nov 1) – Oct 31 portion gets 130% (plus NSD from 10 PM–12 MN), and Nov 1 portion gets regular pay + NSD.
Because pay computations depend on company policies and exact shift timings, it’s best to confirm the detailed breakdown with your HR or payroll department to ensure proper application of DOLE rules.