Holiday Pay Rules in the Philippines: Who Is Entitled and How to Compute

Updated for general guidance as of recent practice. This is a legal-information article in the Philippine context and does not replace advice from counsel or the Department of Labor and Employment (DOLE).

1) Legal Basis & Overview

Article 94 of the Labor Code (as renumbered) mandates holiday pay for regular holidays. Employees who do not work on a regular holiday are generally entitled to 100% of their daily wage, and those who work are entitled to 200% for the first eight hours, with higher premiums for overtime, night work, and when the holiday falls on a scheduled rest day.

For special days, treatment depends on whether the day is declared a special (non-working) day or a special working day, which is set each year via Presidential Proclamation. Special (non-working) days carry a premium only if worked (no work, no pay as the default), while special working days are treated like ordinary working days unless they fall on a rest day.

The annual list of regular holidays and special days is issued every year; Eid’l Fitr and Eid’l Adha are confirmed by separate proclamations after the official lunar sighting.

2) Coverage: Who Is (and Isn’t) Entitled

Covered (as a rule)

All employees in the private sector—whether probationary, regular, project-based, seasonal, or casual—including monthly-paid and daily-paid workers, unless specifically excluded below.
Managers and supervisors are not automatically excluded from holiday pay (unlike some hours-of-work rules); they remain covered unless they fall into an exclusion category.

Common exclusions and limits

Government employees and those of GOCCs with original charters (Civil Service coverage).
Retail and service establishments regularly employing fewer than 10 workers are exempt from paying regular holiday pay (statutory exemption).
Domestic workers (kasambahay) are covered by the Batas Kasambahay with distinct rules; do not rely on standard private-sector computations.
Field personnel and others whose hours cannot be determined with reasonable certainty may be excluded by regulation or practice—assess case-by-case (e.g., purely commission-based agents who set their own time).
Job contractors and principals must track which entity is the employer (legitimate contracting vs. labor-only) because the employer of record bears the holiday pay liability.

Tip: Company policy, CBAs, or long-standing practice may grant better terms than the statutory minimum; those are enforceable.

3) Pre-Conditions for Holiday Pay on Regular Holidays

For regular holidays not worked, entitlement to the 100% daily wage commonly requires that the employee is:

Present or on paid leave on the workday immediately preceding the regular holiday; and
Present or on paid leave on the workday immediately following the regular holiday (if the holiday is sandwiched and company policy requires presence on both sides).

Absences without pay on the day immediately before (and sometimes after, per policy) can disqualify a daily-paid worker from regular-holiday pay (monthly-paid workers are usually unaffected because their monthly rate typically covers 365 days—see §9).

Best practice: Check your company rules on the “holiday-sandwich” requirement—many adopt it for daily-paid employees; it is generally not applied to monthly-paid employees whose monthly rate already includes paid holidays.

4) What Counts as a Holiday

Regular holidays (e.g., New Year’s Day, Araw ng Kagitingan, Labor Day, Independence Day, National Heroes Day, Bonifacio Day, Christmas Day, Rizal Day, Maundy Thursday, Good Friday, and the two Eid feasts) are fixed by law and annual proclamations (movable dates vary).
Special (non-working) days (e.g., EDSA anniversary, All Saints’ Day, additional non-working days) are declared yearly.
Special working days may also be declared (on these, the “ordinary day” rules generally apply).
Some localities declare local special days (city/provincial foundation days). These do not automatically carry national holiday premiums unless expressly declared as such.

5) Core Pay Rules & Computation Formulas

To compute, set:

DR = employee’s basic daily rate (for daily-paid) or the equivalent daily rate (for monthly-paid; see §9).
HR = hourly rate = DR ÷ 8.
NSD (night shift differential) = 10% of the hourly rate applicable on the day for hours worked between 10:00 p.m. and 6:00 a.m.
OT premium = +30% of the hourly rate on that day for work beyond 8 hours.

A) Regular holiday (not worked)

Pay = 100% of DR (subject to presence/paid-leave rule around the holiday for daily-paid).

B) Regular holiday (worked)

First 8 hours: 200% of DR
Overtime hours: (200% × HR) × 1.30 per OT hour → effectively 260% of HR per OT hour
Night work: add 10% of the 200% HR per night hour

C) Regular holiday falling on the employee’s rest day (worked)

First 8 hours: 200% × 1.30 = 260% of DR
Overtime hours: 260% HR × 1.30 = 338% of HR per OT hour
Night work: add 10% of 260% HR per night hour
If not worked: many companies still pay 100% DR for regular holidays even if they fall on rest days (check policy; daily-paid workers may need to satisfy presence rules).

D) Special (non-working) day (not worked)

No work, no pay (unless company/CBA/practice provides otherwise). Exception: monthly-paid usually unaffected (see §9).

E) Special (non-working) day (worked)

First 8 hours: 130% of DR
Overtime hours: 130% HR × 1.30 = 169% of HR per OT hour
Night work: add 10% of 130% HR per night hour

F) Special (non-working) day on rest day (worked)

First 8 hours: 150% of DR
Overtime hours: 150% HR × 1.30 = 195% of HR per OT hour
Night work: add 10% of 150% HR per night hour

G) Special working day (worked)

Treated like an ordinary working day: 100% of DR (no special premium).
If on a rest day: apply rest-day premium (commonly 130% of DR for the first 8 hours), plus OT and NSD as usual.

6) Worked Examples

Assume DR = ₱800 and HR = ₱100.

Regular holiday, worked 10 hours (no rest day), no night work
- First 8 hours: 200% × 800 = ₱1,600
- OT: 2 hours × (200% HR × 1.30) = 2 × (₱200 × 1.30) = 2 × ₱260 = ₱520
- Total = ₱2,120
Regular holiday on rest day, worked 9 hours
- First 8 hours: 260% × 800 = ₱2,080
- OT: 1 × (260% HR × 1.30) = 1 × (₱260 × 1.30) = ₱338
- Total = ₱2,418
Special (non-working) day worked 8 hours
- 130% × 800 = ₱1,040
Special (non-working) day on rest day, worked 9 night hours (10 p.m.–7 a.m.)
- First 8 hours: 150% × 800 = ₱1,200
- OT (1 hr): 150% HR × 1.30 = ₱150 × 1.30 = ₱195
- NSD (9 hrs): 10% × (150% HR) × 9 = 0.10 × ₱150 × 9 = ₱135
- Total = ₱1,530
Regular holiday not worked (daily-paid; presence rule met)
- ₱800 (100% DR)

7) Interactions & Edge Cases

Holiday on scheduled leave:
- Paid leave (e.g., VL/SL) on a regular holiday generally does not reduce holiday pay; the day is paid as a holiday, not as leave (check policy).
- On special (non-working) days, no work, no pay applies unless your policy/CBA says otherwise; leave conversion depends on policy.
Successive holidays: Each holiday is computed separately. Presence rules are assessed around each holiday day (practical application varies by policy for “sandwich” situations).
Absence before/after a regular holiday: Daily-paid employees absent without pay immediately before (and sometimes after) may forfeit the 100% holiday pay unless a favorable policy/CBA provides otherwise.
Flexible work arrangements/compressed workweeks: If the holiday falls on a day that would otherwise have been worked under the agreed schedule, regular rules apply.
Suspension of work due to calamity: If the government orders a suspension on a regular holiday, the day remains a holiday; if the suspension is on a regular workday that becomes no work, apply the no work, no pay principle unless a more favorable policy exists.
Piece-rate/commission-based employees: If covered, compute the equivalent daily rate from the average earnings over a representative period to determine holiday pay. If truly “paid by results” (no discernible work hours) and excluded, document the basis.
Probationary/project/seasonal employees: If they work (or would have worked) on the holiday within their contract period and are otherwise covered, they accrue holiday pay per rules above.

8) Rest Day, Overtime, and Night Shift—Quick Reference

Rest day premium (ordinary day): 130% of DR for first 8 hours.
Overtime: +30% of the hourly rate on that day (which may already include holiday/rest multipliers).
Night shift differential: +10% of the applicable hourly rate for night hours (10:00 p.m.–6:00 a.m.).
Stacking rule: Multiply in layers—start with the base (holiday/rest) rate, then apply OT or NSD on that adjusted hourly rate.

9) Monthly-Paid vs Daily-Paid: How Rates Interact

Monthly-paid employees are typically paid for all days of the month (365-day factor), which already includes regular holidays whether worked or not. Thus, no additional 100% is added for unworked regular holidays; but if they work on a regular holiday, the additional 100% (to reach 200%) is paid for the hours worked (plus rest/OT/NSD, as applicable).
Daily-paid employees are paid based on days/hours actually worked. For unworked regular holidays, they receive 100% DR if presence rules are met. For special (non-working) days not worked, default is no pay unless policy/CBA grants otherwise.

Payroll practice note: Always align the payroll factor (313/314/365) and monthly rate divisor with your policy and DOLE guidance to avoid inadvertent under- or over-payment.

10) Documentation, Policies, and Compliance

Know the year’s proclamations: Identify which dates are regular holidays, special (non-working) days, and special working days. Mark local special days if any.
Adopt a written holiday-pay policy: Clarify presence rules, sandwich policies, treatment of leaves, and the handling of rest-day overlaps.
Keep time records that distinguish ordinary, holiday, rest-day, OT, and night hours.
Honor CBAs and company practice providing better terms; these prevail over statutory minimums.
Audit contractors/vendors to ensure workers are paid correctly; principals may face solidary liability if the contractor fails to pay.

11) Frequently Asked Questions

Q1: Do probationary employees get holiday pay? Yes, if otherwise covered and the holiday falls within their engagement.

Q2: If an employee is absent the day before a regular holiday, do we still pay? For daily-paid workers, many policies deny the unworked-holiday pay if the absence was without pay on the workday immediately preceding (and sometimes following) the holiday. Check your policy/CBA.

Q3: If a special day is declared “special working,” do we add any premium? No—treat it as an ordinary working day, unless it is also a rest day (then apply rest-day premiums).

Q4: Are managers automatically excluded? Not for holiday pay per se. Hours-of-work exemptions (overtime, etc.) do not automatically remove holiday pay. Apply the statutory and policy rules.

Q5: Do monthly-paid employees get extra pay for unworked regular holidays? No, because their monthly pay generally already covers paid regular holidays. They get premium only when they work on the holiday.

12) Practical Checklist for HR/Payroll

Classify the day: regular holiday, special (non-working), or special working; note rest day overlaps.
Determine employee classification: monthly- vs daily-paid; field personnel; excluded categories.
Verify presence rules (for daily-paid on regular holidays).
Compute using the base multiplier (200%, 130%, 150%, etc.), then layer OT (+30%) and NSD (+10%) on the already-adjusted hourly rate.
Document and pay consistently; keep proofs of attendance and computations.

13) Model Clauses (for Company Policy)

Presence Rule (Daily-Paid): “Daily-paid employees shall be entitled to 100% of their daily rate for unworked regular holidays provided they are present or on paid leave on the workday immediately preceding (and, if required, following) the holiday.”
Special Days: “Special (non-working) days follow the ‘no work, no pay’ principle unless otherwise provided by company policy or CBA. Work performed shall be paid at 130% of the basic rate for the first eight hours, and 150% if the day falls on the employee’s scheduled rest day.”
Stacking: “Overtime and night premiums are computed on the applicable adjusted hourly rate for that day (holiday/rest day).”

Final Word

Holiday pay in the Philippines turns on three levers: the type of day, the employee’s pay basis, and actual work (including rest day, OT, and night hours). Set your calendar, codify your rules, and apply the multipliers in the right order—this prevents underpayment claims and keeps your payroll clean.