As an employer, do you observe the holiday pay rules mandated by the Labor Code of the Philippines? If you're an employee, are you paid correctly for the work you've rendered during legal holidays in the Philippines?
It's essential to learn about holiday pay computation in the Philippines. For employees, it ensures they receive fair compensation for working on a holiday. For employers, it ensures compliance with the law and prevents salary disputes from employees.
Here's everything you need to know about holiday pay in the Philippines.
What is Holiday Pay?
Holiday pay is the amount eligible employees in the private sector receive—whether they worked or not—on a regular or special non-working holiday.
Under the Philippine Labor Code,[1] employees covered by holiday pay rules should receive at least 100% of their salary even if they didn't report for work during legal holidays in the Philippines, as long as they're present on the workday or on paid leave on the day immediately before the holiday.
Who is Entitled to Holiday Pay?
Not all employees in the Philippines are entitled to this kind of pay. You're exempted from receiving this government-mandated benefit if you belong to any of the following groups:
- Workers for retail and service companies with less than 10 regular employees
- Managerial employees
- Managerial staff members and officers
- Government employees
- Kasambahays
- Employer's family members who are dependent on the employer for support
- Employees engaged on task, contract, or purely commission basis
How to Compute Holiday Pay in the Philippines
The Department of Labor and Employment (DOLE) enforces two sets of holiday pay rules in the Philippines: one for regular holidays and another for special non-working days.[2]
👉 Regular Holiday Pay Computation
Holiday pay computation rules apply to the following regular holidays in the Philippines:
- New Year’s Day - January 1
- Maundy Thursday - Varies per year
- Good Friday - Varies per year
- Araw ng Kagitingan - April 9 (moved to April 10 in 2023)
- Labor Day - May 1
- Independence Day - June 12
- National Heroes Day - Last Monday of August
- Bonifacio Day - November 30 (moved to November 27 in 2023)
- Christmas Day - December 25
- Rizal Day - December 30
Here are the computation rules:
Computation for Employees Who Did Not Work
For example, if you didn't report for work on the Bonifacio Day holiday in the Philippines (November 27, 2023), you'll still receive your full salary for that day. You shouldn't be deducted for work that isn't performed on a holiday.
Computation for Employees Who Worked for 8 Hours
If you reported for work on a regular holiday, such as the April 9 or December 30 holiday in the Philippines, you should be paid double your salary (basic wage + cost of living allowance or COLA) for the first eight hours worked.
Here's how to compute regular holiday pay:
(Basic wage + COLA) x 200%
For example, if your daily rate is ₱1,000, your double pay for that holiday should be calculated as follows:
₱1,000 x 2 = ₱2,000
Computation for Employees Who Worked Overtime
If you worked for more than eight hours during a regular holiday such as the May 1 holiday in the Philippines, you should be paid an additional 30% of your hourly rate.
Hourly rate x 200% x 130% x number of hours worked
Let's say your hourly rate is ₱125, and you worked overtime for two hours (for total overtime of 10 hours). This should be your regular holiday pay computation:
₱125 x 2 x 1.30 x 10 hours = ₱3,250
Computation for Employees Who Worked for 8 Hours During Their Rest Day
If you worked during a regular holiday that also falls on your rest day (a Saturday or a Sunday, for example), you must receive 30% of your 200% salary in addition to 200% of your salary.
Use this holiday pay formula for a simpler computation:
[(Basic wage + COLA) x 200%] + [30% (Basic wage x 200%)]
For a daily rate of ₱1,000, the holiday rest day pay is computed as follows:
[(₱1,000 x 2)] + [0.30 (₱1,000 x 2)]
[₱2,000] + [0.30 x ₱2,000]
₱2,000 + ₱600 = ₱2,600
Computation for Employees Who Worked Overtime During Their Rest Day
If you worked for more than eight hours on a regular holiday (which is also your rest day), you'll get paid an additional 30% of your hourly rate.
Hourly rate x 200% x 130% x 130% x number of hours worked
Here's how to compute your holiday pay with overtime on your rest day:
₱125 x 2 x 1.30 x 1.30 x 10 hours = ₱4,225
Related reading:
- 13th-Month Pay Computation Sample: How Much Should You Receive?
- Laid Off? Here’s How to Compute Separation Pay in the Philippines
👉 Special Holiday Pay Computation
Here are the holiday pay computation rules that apply to the following special non-working days:
- Day after New Year's Day - January 2
- EDSA People Power Revolution - February 25 (moved to February 24 in 2023)
- Black Saturday - Varies per year (April 8 in 2023)
- Ninoy Aquino Day - August 21
- Barangay and Sangguniang Kabataan elections - October 30
- All Saints’ Day - November 1
- All Souls' Day - November 2
- Feast of the Immaculate Conception of Mary - December 8
- Last Day of the Year - December 31
Note: The President issues separate proclamations declaring national holidays for the observance of Eid’l Fitr, the end of the month-long Ramadan, and Eid’l Adha, the Feast of the Sacrifice, after the Ramadan 2023 dates are determined in accordance with the Islamic calendar or the lunar calendar.
Computation for Employees Who Did Not Work
The no work, no pay rule applies when you don't report for work on special non-working days such as the February 25 holiday in the Philippines, unless your employer has a policy or collective bargaining agreement (CBA) that requires payment on such a holiday.
Computation for Employees Who Worked for 8 Hours
How to compute your November 1 holiday pay in 2023 if you have to report to work on the day? If you work during a special non-working day, you must receive an additional 30% of your basic wage on the first eight hours worked.
Here's the special non-working holiday pay computation:
(Basic Wage x 130%) + COLA
If your daily rate is ₱1,000 (no COLA), your holiday pay is computed as follows:
₱1,000 x 1.30 = ₱1,300
Computation for Employees Who Worked Overtime
If you work overtime, you'll get an additional 30% of your hourly rate. The holiday pay for those who have to work overtime on October 30 (a special non-working day for the Barangay and SK Elections 2023), for instance, is computed thus:
Hourly rate of the basic wage x 130% x 130% x number of hours worked
With an hourly rate of ₱125 and two hours of overtime work, here's how to calculate your pay during a special non-working day:
₱125 x 1.30 x 1.30 x 10 hours = ₱2,112.50
Computation for Employees Who Worked for 8 Hours on Their Rest Day
If you worked on a special non-working day that also falls on your rest day, you'll get an additional 50% of your basic wage for the first eight hours.
For a simpler holiday pay computation, use this formula:
(Daily rate × 150%) + COLA
For a daily rate of ₱1,000 (no COLA), your holiday pay is computed as follows:
₱1,000 x 1.50 = ₱1,500
Computation for Employees Who Worked Overtime on Their Rest Day
If you worked overtime on a special non-working day (which is also your rest day), you'll receive an additional 30% of your hourly rate.
Hourly rate of the basic wage x 150% x 130% x number of hours worked
Here's how to compute your holiday rest day pay with overtime of two hours:
₱125 x 1.50 x 1.30 x 10 hours = ₱2,437.50
Note: All the sample holiday pay computations above are based on DOLE's holiday pay rules under Labor Advisory No. 24 Series of 2023.[3]
Related reading:
- Bye, Office: What to Know About Back Pay Computation and Other Benefits When You Resign
- Hazard Pay Guidelines Government and Private Employees Need to Know
Is Holiday Pay Taxable?
Only minimum-wage earners (MWE) are exempted from withholding taxes for their holiday pay. This goes the same with overtime pay, night differential pay, and hazard pay earned by an MWE.
Final Thoughts
Holiday pay rules exist to protect the rights of workers to compensation that's due to them. Employees must scrutinize their payslips and report any incorrect holiday pay computation to the HR or Accounting Department. For their part, employers should make sure they compute their employees' holiday pay correctly.
Bookmark this holiday pay computation guide for the next time you need to determine your holiday pay in the Philippines.
Sources:
- [1] Labor Code of the Philippines (ChanRobles Virtual Law Library)
- [2] COUNT YOUR BLESSINGS: COMPUTE YOUR HOLIDAY PAY! (Alburo Alburo & Associates Law Offices)
- [3] DOLE Labor Advisory No. 24 Series of 2023
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