Holiday Pay Computation in the Philippines

PUBLISHED ON: January 14, 2021
LAST UPDATED ON: May 12, 2021

(Photo credit to Waldemar Brandt)

Holiday Pay is a type of payment given to employees to compensate work performed on holidays in the Philippines.

The term holiday is defined by Merriam-Webster as "a day on which one is exempt from work. Specifically, a day marked by a general suspension of work in commemoration of an event".

However, the Philippines categorizes Holidays into 2 types in terms of payment of wages: Regular Holiday; and Special days, which is further divided into working days and non-working holidays. Although both Regular Holiday and Special Non-Working Days can be classified as Premium pay according to International Labor Standards, only Special Non-working days are explicit considered as premium pay in the Philippines.

Table of Contents

Defining Regular Holiday Pay

What is Holiday Pay?

Holiday Pay is a payment given to employees to compensate work performed on days wherein such day has been declared as a Regular Holiday or Special Non-Working Day.

What is Regular Holiday Pay?

Regular Holiday Pay is a type of Holiday Pay that is compensates the employee even if no work has been done while payment is doubled should the employee report for work.

The right to Regular Holiday Pay in the Philippines is mandated in Presidential Decree No. 442, also known as the Labor Code of the Philippines, which is stated in Article 94 of the renumbered Labor Code

a. Every worker shall be paid his regular daily wage during regular holidays, except in retail and service establishments regularly employing less than ten (10) workers;
b. The employer may require an employee to work on any holiday but such employee shall be paid a compensation equivalent to twice his regular rate; and
c. As used in this Article, "holiday" includes: New Year’s Day, Maundy Thursday, Good Friday, the ninth of April, the first of May, the twelfth of June, the fourth of July, the thirtieth of November, the twenty-fifth and thirtieth of December and the day designated by law for holding a general election.

Right to Holiday Pay

Can a business be open during a Regular Holiday?

According to Section 2, Rule III, Book Three of the Implementing Rules and Regulation of the Labor Code of the Philippines, businesses may operate during Holidays provided that employees are given weekly rest days and other benefits they are entitled.

Entitlement to Holiday Pay

Who are entitled to Holiday Pay?

All employees are entitled to Holiday Pay unless they have been explicitly stated as exempted.

Who are exempted from Holiday Pay?

The Implementing Rules and Regulations of the Labor Code of the Philippines states that the following the exempted from the coverage of Holiday Pay:

  • Those of the government and any of the political subdivision, including government-owned and controlled corporation
  • Those of retail and service establishments regularly employing less than ten (10) workers
  • Domestic helpers and persons in the personal service of another
  • Managerial employees as defined in Book Three of the Code;
  • Field personnel and other employees whose time and performance is unsupervised by the employer including those who are engaged on task or contract basis, purely commission basis, or those who are paid a fixed amount for performing work irrespective of the time consumed in the performance thereof.

Are Monthly Paid employees entitled to Holiday Pay?

Yes, Monthly Paid employees are entitled to Holiday Pay as stated in Section 2, Rule IV, Book 3 of the Implementing Rules and Regulations of the Labor Code of the Philippines.

What are the days that are considered Regular Holidays for Holiday Pay?

The following is the list of Regular Holidays in the Philippines

Regular HolidayDate
New year's DayJanuary 1
Maundy ThursdayMovable Date
Good FridayMovable Date
Eidul FitrMovable Date
Eidul AdhaMovable Date
Araw ng Kagitingan
(Bataan and Corregidor Day)
Monday nearest April 9
Labor DayMonday nearest May 1
Independence DayMonday nearest June 12
National Heroes DayLast Monday of August
Bonifacio DayMonday nearest November 30
Christmas DayDecember 25
Rizal DayDecember 30

Computation of Regular Holiday Pay

How is Regular Holiday Pay calculated?

The payment computation of Holiday Pay is provided by Section 4 and 5, Rule IV, Book Three of the Labor Code of the Philippines.

What is the Holiday Pay computation of an employee that did not report for work?

An employee that did not report for work shall receive a Holiday Pay equivalent to 100% of their wage, for that day or that they were present or on leave with pay.

The computation is as follows:

[(Basic wage + COLA) x 100%]

In this computation, employees are incentivized to celebrate the holidays instead of reporting for work.

What is the Holiday pay computation of an employee that reported for work?

For work done during the regular holiday, the regular holiday, the employee shall be paid 200% of their wage for that day for the first 8 hours

The computation is as follows:

[(Basic wage + COLA) x 200%]

What is the Holiday Pay computation for overtime work of an employee?

For work done in excess of 8 hours (overtime work), they shall be paid an additional 30% of their hourly rate on said day

The computation is as follows:

[Hourly rate of the basic wage x 200% x 130% x number of hours worked]

What is the Holiday Pay computation of an employee that worked on their rest day?

An employee that reported for work during a Regular Holiday, which was supposedly his rest day, shall be paid an additional 30% of their basic wage of 200%.

The computation is as follows:

[(Basic wage + COLA) x 200% + [30% (Basic wage x 200%)]

In this computation, the scheduled rest day is therefore compensated as an additional 30% of the employee's basic wage.

What is the Holiday Pay computation for overtime work of an employee that worked on their rest day?

An employee that worked overtime during a Regular Holiday, which was supposedly his rest day, shall be paid an additional 30% of their hourly rate on said day

The computation is as follows:

(Hourly rate of the basic wage x 200% x 130% x 130% x number of hours worked).

In this computation, the excess hours is compensated as work performed on a Regular Holiday, Rest Day, and Overtime.

Before and After Holiday Pay Rules

Reporting for work prior to the Regular Holiday

The Implementing Rules and Regulations of the Labor Code provides a requirement for employees to be eligible for Holiday Pay.

An employee who was on leave of absence without pay immediately prior to the Regular Holiday may not be paid of the Holiday Pay, unless the person has worked on the Regular Holiday.

Should an employee file a leave of absence with pay, for example using their Service Incentive Leave or Vacation Leave, then they are eligible for the Holiday Pay regardless if they worked or not on the Regular Holiday.

Non-working day prior to the Regular Holiday

An employee is still entitled to Holiday Pay even if the day prior to the Regular Holiday is non-working day in the company or a scheduled rest day should that employee reported for prior to such non-working day or rest day.

Successive Regular Holidays

A worker may not be paid Holiday Pay for 2 successive holidays if he is on leave of absence without pay prior to the first Holiday. However, the worker shall be entitled to Holiday Pay on the second Holiday should the employee report for work on the first Holiday.

Payment of Holiday Pay during Temporary Cessation of Business

The payment of Holiday Pay regarding the temporary cessation of business is stated in the provision of Section 7, Rule IV, Book 3 of the Implementing Rules and Regulations of the Labor Code.

Scheduled or Periodic Shutdown

A company that temporary closes or shutdowns, due to a scheduled maintenance of machineries, equipment and other analogous activities, during the period that covers a Holiday shall be compensated.

Temporary Cessation of Business due to financial downturns

A company that declares a temporary cessation of business due to financial concerns, as authorized by the Department of Labor and Employment (DOLE) Secretary, may not pay Holidays of employees.

Holiday Pay of Certain Employees

Private School

Private school teachers and faculty members of colleges and universities may not be given Holiday Pay during semestral vacations. However, they are entitled to Holiday Pay during the Regular Holidays during Christmas Vacation.

Employees that are paid by Results, Output, or Piece work

For entitled employees that are paid by results, output, or piece work, the Holiday Pay is based on their average daily earnings for the last 7 actual working days prior the Regular Holiday. However, Holiday pay shall not be less than the applicable statutory minimum wage rate.

Seasonal Workers

For seasonal workers, Holiday Pay may not be given during off-season when they are not at work.

Workers who have no regular working days

For workers who do not have regular working days, employees are entitled to Holiday Pay.

Miscellaneous

Are all employees entitled to Holiday Pay?

Yes, only those that are indicated to be exempted from Holiday Pay are not entitled to Holiday Pay.

Can employees be required to work on a Holiday?

Yes, an employer may require an employee to work on a Holiday. This is explicitly stated in Article 94 (b), Chapter III, Book Three of the Labor Code of the Philippines.

Are casual employees entitled to Holiday Pay?

Yes, casual employees are entitled to Holiday Pay unless they are covered in the list of exempted employees from payment of Holiday Pay.

Are Probationary Employees entitled to Holiday Pay?

Yes, Probationary employees are entitled to Holiday Pay. There is nothing in the Labor Code or its Implementing Rules and Regulation which states such exemption.

Are trainees entitled to Holiday Pay?

If trainees are defined as interns, that are usually unpaid or only receive an allowance, then they are not entitled to Holiday Pay as they do not receive any regular payment.

Does an employee, who was absent before the Holiday, but worked on the holiday itself entitled to Holiday Pay?

Yes, the employee is entitled to Holiday Pay if the person reported for work on the Holiday even if they were absent prior to the holiday. This is explicitly mentioned in Section 6, Section IV, Book 3 of the Implementing Rules and Regulation of the Labor Code of the Philippines.

Work Hours compensable for a shift started on a Regular Holiday and continued to an Ordinary Working Day

The work hours that is considered for additional compensation for the Regular Holiday only falls within the 24-hours of said Regular Holiday. Hours worked on 2 May, which is an ordinary day, is not compensable for additional compensation.

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