In the Philippine labor landscape, holiday pay is a statutory benefit mandated by the Labor Code of the Philippines (specifically Article 94) and further clarified by the Department of Labor and Employment (DOLE) through annual labor advisories. It is designed to protect a worker’s right to a regular income despite the interruption of work due to national or local observances.

I. Classification of Holidays

The Philippine government recognizes three distinct types of holidays, each with different effects on payroll computation:

Regular Holidays: These have a fixed date (with the exception of Islamic holidays like Eid’l Fitr) and are compensable even if the employee does not report for work.
Special (Non-Working) Days: These follow the principle of "no work, no pay." Employees only receive compensation if they actually work, or if a favorable company policy/Collective Bargaining Agreement (CBA) exists.
Special (Working) Days: These are treated as ordinary working days. No premium pay is required for work performed; however, should the employee work overtime, standard overtime rates apply.

II. Coverage and Exemptions

Holiday pay applies to all employees in the private sector, regardless of their status (regular, probationary, casual, or project-based). However, the following categories are excluded from the entitlement:

Government employees (covered by Civil Service rules).
Managerial employees and officers of the managerial staff.
Field personnel whose time and performance are unsupervised.
Domestic helpers and persons in the personal service of another.
Employees of retail and service establishments regularly employing fewer than ten (10) workers.
Workers paid by results (e.g., pakyao or task-basis), unless specifically provided by law.

III. Computation of Pay

1. Regular Holidays

Unworked: The employee is entitled to 100% of their daily wage.
Worked (First 8 hours): The employee is entitled to 200% of their daily wage.
Overtime (Beyond 8 hours): The rate is the hourly rate of the 200% pay plus an additional 30% of said hourly rate.
Worked on a Rest Day: If the holiday falls on the employee’s scheduled rest day and they work, they receive an additional 30% of the 200% rate (Total of 260%).

2. Special (Non-Working) Days

Unworked: No pay applies (unless company policy states otherwise).
Worked (First 8 hours): The employee is entitled to an additional 30% of their daily wage (Total of 130%).
Overtime (Beyond 8 hours): The rate is the hourly rate of the 130% pay plus an additional 30% of said hourly rate.
Worked on a Rest Day: If the holiday falls on a rest day and they work, the premium increases to 50% (Total of 150%).

3. The "Double Holiday" Rule

In rare instances where two regular holidays fall on the same day (e.g., Araw ng Kagitingan falling on Maundy Thursday), the following rules apply:

Unworked: The employee is entitled to 200% of their daily wage.
Worked: The employee is entitled to 300% of their daily wage.

IV. Eligibility Conditions: The "Day Before" Rule

Entitlement to holiday pay for an unworked regular holiday is contingent upon the employee's attendance record:

Presence or Paid Leave: To be entitled to 100% pay for an unworked regular holiday, the employee must be present or on leave of absence with pay on the workday immediately preceding the holiday.
Absence Without Pay: If the employee is absent without pay on the workday immediately preceding the holiday, they are generally not entitled to holiday pay unless they work on the holiday itself.
Successive Holidays: Where there are two successive regular holidays (e.g., Maundy Thursday and Good Friday), an employee who is absent without pay on the day before the first holiday is not entitled to pay for both, unless they work on the first holiday.

V. Summary Table of Holiday Pay Rates

Scenario	Regular Holiday	Special (Non-Working) Day
Unworked	100%	0% ("No work, no pay")
Worked (First 8 hrs)	200%	130%
Worked (Overtime)	Hourly Rate $\times 200% \times 130%$	Hourly Rate $\times 130% \times 130%$
Worked (Rest Day)	260%	150%
Worked (Rest Day + OT)	Rest Day Rate $\times 130%$	Rest Day Rate $\times 130%$

VI. Important Jurisprudence and Reminders

Monthly-Paid vs. Daily-Paid: The Supreme Court has clarified that monthly-paid employees are generally presumed to be paid for all days of the month, including holidays, if their monthly salary is computed using a "factor" or "divisor" that accounts for all days in a year (e.g., 365 days).
Night Shift Differential: If work is performed between 10:00 PM and 6:00 AM on a holiday, the Night Shift Differential (minimum of 10% on top of the holiday hourly rate) must also be applied.
Company Practice: Employers cannot unilaterally withdraw holiday pay benefits if they have become a "company practice" through long-term, consistent implementation, even if the law does not strictly require it for that specific employee class.