Below is a comprehensive discussion of how Philippine labor laws address pay computation for a regular holiday that falls on an employee’s rest day, including the legal basis, general formulas, and practical examples. This discussion focuses on the rules set by the Labor Code of the Philippines (Presidential Decree No. 442, as amended) and the official Department of Labor and Employment (DOLE) holiday pay guidelines.

1. Legal Basis

Labor Code of the Philippines
- Presidential Decree No. 442, as amended (Book III, Rule IV) outlines employees’ entitlements to holiday pay and the conditions under which they may receive it.
DOLE Guidelines / Advisories
- The Department of Labor and Employment (DOLE) periodically issues Labor Advisories and other clarifications (e.g., Labor Advisory on the Payment of Wages for the Regular Holidays and Special (Non-Working) Days) to update the public on how to compute statutory benefits, including holiday pay.

The rules in this article apply primarily to rank-and-file employees covered by holiday pay provisions. Managerial employees, field personnel, and certain other categories (e.g., government employees, members of the family directly dependent on the employer for support) are generally excluded from holiday pay coverage, pursuant to the Labor Code.

2. General Principles of Regular Holiday Pay

2.1 “No Work, No Pay” Versus “Deemed Paid”

Daily-Paid Employees: Typically follow the “no work, no pay” principle. They are entitled to holiday pay only if they are present or on authorized leave (with pay) on the workday immediately preceding the holiday.
Monthly-Paid Employees: Often considered “deemed paid” for holidays. Their monthly salary usually factors in payment for regular holidays, so they do not lose pay if they do not report for work on a regular holiday.

For both categories, if they work on a regular holiday, the law requires additional compensation on top of whatever is deemed paid or regularly earned.

3. Pay Computation When a Regular Holiday Falls on a Rest Day

Under Philippine labor law, two main scenarios arise when a regular holiday falls on an employee’s rest day: (1) the employee does not work; and (2) the employee works. Each is calculated differently.

3.1 Scenario A: Employee Does Not Work on a Regular Holiday that Falls on a Rest Day

Daily-Paid Employees
- The usual rule for an unworked regular holiday is 100% of the daily wage rate.
- However, if the holiday coincides with the rest day, DOLE guidelines provide an additional 30%.
- Hence, total pay = Daily Wage × 1.30 (or 130%).
Monthly-Paid Employees
- Since regular holidays are already considered “paid” days under most monthly salary schemes, they continue to receive their usual monthly compensation.
- If the monthly-pay arrangement explicitly does not include holiday pay (atypical but possible in certain industries or pay structures), the 130% rule for an unworked holiday that falls on a rest day may apply. Usually, however, monthly-paid employees receive their same monthly salary without reduction.

Summary (Unworked)

Daily-Paid: 130% of daily wage

Monthly-Paid: Usually already covered by monthly salary (no additional amount in practice)

3.2 Scenario B: Employee Works on a Regular Holiday that Falls on a Rest Day

Basic Rule for working on a regular holiday is 200% (double pay) for the first eight (8) hours.
If it also falls on the rest day, the employee gets an extra 30% on top of the 200%.
Hence, total pay = Daily Wage × 2 (200%) + 30% of that 200%.
- In formula form: (Daily Wage × 2) × 1.30 = Daily Wage × 2.60 (260% of the regular daily rate).

Example (Worked, 8 Hours)

Let’s say the employee’s daily wage is ₱500.

Pay for 8 hours worked on a regular holiday that falls on a rest day:

₱500 × 2.60 = ₱1,300

For monthly-paid employees who are deemed to have already been paid for the day, the additional pay portion would be what goes beyond the regular salary for that day. Often, employers calculate an extra 100% for a standard worked holiday, plus 30% more if it is the rest day, effectively mirroring the same 260% standard when everything is broken down.

4. Overtime, Premium, and Night Shift Differentials

If an employee works beyond eight (8) hours on a regular holiday falling on a rest day:

Overtime pay is computed as the holiday rate for the hour worked plus an additional 30% of that hourly holiday rate.
In other words, if the base rate for the day is 260% of the normal rate (for the first 8 hours), the overtime portion is the hourly rate on that day (which is 260% ÷ 8 per hour) plus an extra 30% of that hour’s rate for every hour in excess of eight.

For employees working during night shift hours (10:00 p.m. to 6:00 a.m.), the night shift differential (NSD) must also be calculated based on the holiday-and-rest-day-adjusted hourly rate.

5. Conditions for Entitlement

Presence or Paid Leave Prior to the Holiday
- Daily-paid employees generally must be present or on authorized leave (with pay) on the last working day before the holiday to be entitled to holiday pay.
- Monthly-paid employees typically have it built into their compensation.
Coverage Under the Labor Code
- Rank-and-file employees in the private sector not excluded by law or regulation are covered.
- Managerial staff, government employees, and certain other categories may have different rules.
“No Work, No Pay” Principle
- If an employee on a daily-rate basis fails to report on both the workday before the holiday and the holiday itself without an authorized leave, they typically lose the holiday pay entitlement unless a more favorable company policy or Collective Bargaining Agreement (CBA) provides otherwise.

6. Practical Examples

Daily-Paid Employee, Rest Day on a Sunday, Regular Holiday Falls on Sunday, Does Not Work
- Daily wage = ₱600
- Pay = ₱600 × 1.30 = ₱780
- (Provided the employee is entitled to holiday pay and meets presence or leave requirements.)
Daily-Paid Employee, Rest Day on a Sunday, Regular Holiday Falls on Sunday, Works 8 Hours
- Daily wage = ₱600
- Pay for 8 hours = ₱600 × 2.60 = ₱1,560
- Overtime beyond 8 hours is computed at 260% × (hourly rate) × 1.30 per hour beyond eight.
Monthly-Paid Employee, Rest Day on a Sunday, Regular Holiday Falls on Sunday, Does Not Work
- Typically receives no extra pay, because the monthly rate usually covers the holiday. They still get their usual monthly salary.
Monthly-Paid Employee, Rest Day on a Sunday, Regular Holiday Falls on Sunday, Works 8 Hours
- They already receive their salary for that day, but must be paid extra for working on a holiday that is also their rest day. That extra is effectively the difference between their normal daily rate and the 260% holiday/rest day rate.

7. Points of Clarification

Company Policy or CBA
- If company policies or a CBA provide for rates more favorable to the employee, those supersede the statutory minimum.
- Always check internal guidelines or agreements that might grant higher premiums than the Labor Code’s baseline.
Special (Non-Working) Days vs. Regular Holidays
- The rates and rules in this article apply only to regular holidays (e.g., New Year’s Day, Araw ng Kagitingan, Maundy Thursday, Good Friday, Labor Day, Independence Day, etc.).
- Special non-working days follow a different set of premium rates (e.g., 130% if worked, “no work, no pay” if unworked).
Absences and Leaves
- When the holiday falls on a rest day, but the employee was absent without authorized leave on the day immediately preceding, they can lose their entitlement to holiday pay (for daily-rated employees).
COLA (Cost of Living Allowance)
- DOLE holiday pay guidelines usually include basic wage + COLA in the computation, unless the COLA has already been integrated into the basic wage.
- In practice, many employers simply refer to the “daily rate” as inclusive of COLA.

8. Summary of Key Computations

Regular Holiday on a Rest Day, Unworked
- Daily-Paid Employees: 130% of daily wage (assuming eligibility)
- Monthly-Paid Employees: Usually no extra because of monthly “deemed paid” arrangement
Regular Holiday on a Rest Day, Worked (First 8 Hours)
- Daily-Paid Employees: 260% of daily wage
- Monthly-Paid Employees: Already have daily wage portion covered; must receive the difference (effectively 160% additional) to reach 260% total
Beyond 8 Hours (Overtime)
- Overtime rate = (Holiday-and-Rest-Day Hourly Rate) × 1.30

9. Practical Takeaways

Whenever a regular holiday intersects with a rest day, the law grants higher pay than a typical workday or even an ordinary holiday.
Employers and employees alike should reference DOLE holiday pay guidelines to ensure proper calculations.
Being aware of conditions such as presence before the holiday, authorized leave, and coverage under the Labor Code is crucial to avoid confusion or disputes.
Written company policies and Collective Bargaining Agreements can provide additional clarity or more favorable terms, but they cannot provide for less than the minimum requirements mandated by law.

Final Note

Understanding and properly applying the holiday pay rules for a regular holiday falling on a rest day is essential for both compliance and fairness. By following the core guidelines above—anchored on the Labor Code and DOLE’s implementing regulations—employers can avoid disputes and ensure that employees receive their lawful entitlements. When in doubt, always consult official DOLE issuances or seek professional legal advice to account for any specific workplace arrangements or more recent regulatory updates.