REST-DAY, HOLIDAY & PREMIUM-PAY COMPUTATION (Philippine private-sector perspective, as of 16 May 2025)
1. Overview
Under Book III of the Labor Code of the Philippines (Presidential Decree No. 442, as renumbered by DOLE Department Order 212-20 and later issuances), employees who render work on rest days, regular holidays and special days enjoy premium pay on top of their basic wage. Employers that miscompute—or fail to pay—these premiums face money claims, labor-standards inspections, damages and criminal liability.
2. Statutory & Regulatory Sources
| Instrument | Key Provisions |
|---|---|
| Labor Code (Arts. 91-96 old nos.; now Arts. 86-92) | Weekly rest day, premium/rest-day pay, holiday pay, overtime, night-shift differential, exemptions |
| Omnibus Rules Implementing the Labor Code — Book III, Rule IV | Detailed formulas; inclusion of COLA; overtime rates on rest/holiday work |
| DOLE Wage Orders & Advisories (issued per region & per holiday) | Exact daily/collected COLA amounts; yearly matrices of “wage treatment” for each proclaimed holiday |
| Presidential Proclamations (Proclamation de Annus) | Declare the year’s regular, special non-working & special working days |
| Jurisprudence – e.g., AutoBus v. Bautista (G.R. 156367, 20 May 2004); Intercontinental Broadcasting v. Benipayo (G.R. 142945, 6 Feb 2007) | Clarify computation when no separate agreement; reinforce “species of overtime” doctrine |
(Domestic workers are governed by R.A. 10361; seafarers by POEA/Marina rules; public officers by the Administrative Code.)
3. Weekly Rest Day
- Scheduling: At least 24 consecutive hours every 7-day period. In practice many employers adopt Sunday, but any day may be fixed by written notice or CBA.
- Substitution: Employer may assign another rest day when needed by exigencies of business, provided 24-hour notice (except emergencies).
4. Philippine Holidays (2025)**
| Type | Legal Basis | Pay Rule if no work | Pay Rule if worked ¹ |
|---|---|---|---|
| Regular Holiday (e.g., 01 Jan, 09 Apr, 01 May, 12 Jun, last Mon Aug, 30 Nov, 25 Dec) | Exec. Order 292 §94; P.D. 442 Art. 94; annual Presidential Proclamation | 100 % of daily wage | 200 % for first 8 h (+ 30 % if also rest day = 260 %; add’l 30 % for overtime) |
| Special Non-Working Day (e.g., 25 Feb, 01 Nov, 08 Dec, Chinese New Year, EDSA anniv., declared Eid’l Adha & Eid’l Fitr, etc.) | Proclamation | “No work, no pay,” unless company policy/CBA | 130 % for first 8 h; if also rest day = 150 %; overtime = hourly rate × 130 % |
| Special Working Day (e.g., 02 Nov, 24 Dec when so declared) | Proclamation | Treated as ordinary working day | No premium; only overtime (25 %) and night diff (10 %) apply |
¹ Hourly overtime premium is computed on the hourly rate of the day concerned.
5. Premium Pay for Work on Ordinary Rest Day (not a holiday)
| Portion Worked | Formula | % of Basic Daily Wage |
|---|---|---|
| First 8 hours | Daily wage × 130 % | 130 % |
| Overtime (>8 h) | Hourly rest-day rate × 130 % | 169 % |
| Night-shift (10 PM-6 AM) | Applicable hourly rate × 110 % | add 10 % |
If the rest day is a successive rest day because of compressed workweek/CWW, the same rates apply.
6. When Rest Day Coincides with a Holiday
Regular Holiday + Rest Day
- 1st 8 h = Basic × 260 %
- Overtime = Hourly rate × 338 % (260 % × 130 %)
Special Non-Working Holiday + Rest Day
- 1st 8 h = Basic × 150 %
- Overtime = Hourly rate × 195 % (150 % × 130 %)
7. Step-by-Step Computation
(Illustrations assume the 2025 NCR non-agricultural minimum of ₱645/day and that COLA is already integrated into the basic wage.)
A. Monthly-Paid Employee, Sunday Rest Day Worked 10 hours
Find the Equivalent Hourly Rate Daily rate = Monthly salary ÷ 26 Hourly rate = Daily ÷ 8
Compute premiums
- First 8 h: hourly × 8 × 130 %
- Next 2 h overtime: hourly × 2 × 169 %
Add night diff if any.
B. Daily-Paid Employee, Rest Day + Regular Holiday (worked 12 h)
- First 8 h = ₱645 × 260 % = ₱1 ,677
- Overtime 4 h = Hourly (₱80.625) × 4 × 338 % = ₱1 ,089.26
- Total premium pay = ₱2 ,766.26 (exclusive of SSS, PhilHealth, Pag-IBIG contributions).
8. Coverage & Exemptions
Premium-pay rules do not apply to:
- Government employees;
- Managerial employees (Art. 82);
- Field personnel and those unsupervised as to time & performance;
- Domestic helpers (kasambahays have their own rest-day protections under R.A. 10361);
- Persons in personal service of another;
- Workers paid by results where output-rates were approved by DOLE (except if they work on regular holidays—the 100 %/260 % rule still applies).
9. COLA, Allowances & “Basic Wage”
- COLA (Cost of Living Allowance) is included in the “basic wage” for computing premium pay, unless the pertinent Wage Order expressly states otherwise.
- Allowances in kind (meals, housing) are normally excluded unless convertible to cash and part of wage under CBA/contract.
10. Special Situations
| Scenario | Treatment |
|---|---|
| Suspension of work due to force majeure/public calamity | Employee is usually “no work, no pay,” but employers may grant discretionary pay; work rendered on the suspended day that later becomes a special day follows ordinary-day rates unless a proclamation upgrades it. |
| Offsetting/“Compensatory rest” | Allowed only by mutual agreement or CBA; does not relieve employer from paying statutory premiums unless the rest day not worked is paid. |
| Compressed Workweek (e.g., 4×11) | Rest-day rules still hinge on the 24 h consecutive rest requirement. Premium percentages are the same; only the base hourly rate changes. |
| Flexible/Hybrid work and WFH | Location is immaterial; what matters is whether the employee is working within scheduled rest/holiday hours. Employers must maintain electronic logs to defend payroll. |
11. Tax Treatment
- Premium pay is taxable compensation income but is included in the cumulative annualized withholding-tax computation under RR 11-2018.
- However, there is no separate fringe-benefit tax on mandatory premiums.
12. Enforcement & Penalties
- Non-payment constitutes labor-standards violation (Art. 303) punishable by fine ₱40 ,000-₱200 ,000 and/or imprisonment.
- DOLE inspectors may issue Compliance Orders with 30-day restitution period; failure triggers Writ of Execution.
- Worker may file an NLRC money claim (3-year prescriptive period).
13. Key Doctrines from Jurisprudence
- “Species of overtime” principle – Overtime occurring during a rest day or holiday inherits the day’s higher hourly rate (Phil. Global Communications v. De Vera, G.R. 167415, 24 Jan 2011).
- Premium pay ≠ overtime pay – An employee can recover both premium (30 %) and overtime premium (25/30 %) if conditions concur.
- Weekly rest is inalienable – Even with employee’s written waiver, employer remains liable for premium (Sime Darby v. NLRC, G.R. 119205, 15 Apr 1998).
14. Best-Practice Checklist for Employers (2025)
- Maintain a written Schedule of Rest Days & Shifts, countersigned by employees.
- Issue holiday-pay bulletins each time Malacañang releases a proclamation.
- Use separate payroll codes for: (a) rest-day premium, (b) regular-holiday pay, (c) special-day premium, (d) overtime on each.
- Retain biometric/time-sheet data for at least 3 years.
- Provide digital payslips showing the exact factors (e.g., “RD 130 %,” “RH 260 %”).
15. Frequently Asked Questions
| Question | Short Answer |
|---|---|
| Can the employer simply give an extra rest day instead of paying the 30 % premium? | Not unless (1) there is a CBA or written agreement and (2) that extra rest day is paid; otherwise the 30 % premium is mandatory. |
| Do managers entitled to overtime if they work on a regular holiday? | True managerial employees (lay-off, hire, discipline) are completely exempt. Supervisory employees without hiring/firing power are covered. |
| What if the employee is absent without pay on the day immediately preceding a regular holiday? | Under Art. 94 the holiday-pay rule still applies; the “successive regular days” requirement was repealed by R.A. 9492 (2007). |
| Is premium pay computed on basic wage or gross pay? | Compute on basic wage + integrated COLA, excluding overtime, night diff, 13th-month, de minimis benefits. |
16. Conclusion
Rest-day and holiday-pay rules embody the State’s policy that rest is the default and that labor is paid a premium each time it is asked to forgo rest or perform work during national observances. The statutory matrix may appear daunting—130 %, 150 %, 260 %, 338 %—but the underlying logic is straightforward once one identifies three variables: (1) type of day, (2) overtime, (3) night shift. Consistent application of these formulas, backed by accurate timekeeping and clear communication, shields employers from costly claims while giving workers their due. Always check the latest Wage Orders and Presidential proclamations, and when in doubt, err on the side of paying the higher statutory rate.