The Philippines thrives on celebrations. From religious holidays to historic commemorations, there’s always a reason to gather, unwind, and reflect. However, for business leaders and HR managers, these events come with another important aspect: the labor law on holiday pay.
Understanding these regulations is crucial to ensuring compliance and proper employee compensation. The complexities of holiday pay in the Philippines seem daunting, but they’re essential for maintaining smooth operations and employee satisfaction.
In this article, we’ll break down the entitlements for regular and special non-working holidays, explain how to compute holiday pay, and discuss eligibility conditions and exceptions.
What is Holiday Pay in the Philippines?
Holiday pay is a legally mandated benefit employees receive on regular holidays, regardless of whether they work. It ensures workers receive their regular income despite rest days on holidays and allows them to participate in national celebrations.
According to Articles 93 and 94 of the Philippine Labor Code, employees shall receive 100% of their daily wage if they don’t work on a holiday. If they work during a holiday, they get an additional 30% of their regular wage; if the holiday falls on their scheduled rest day, they receive an extra 50%.
Who are entitled to holiday pay in the Philippines? Basically, all workers except:
- Government employees
- Housekeepers
- Managerial employees
- Managerial staff and officers compliant with the Labor Code
- Retail and service workers in establishments with fewer than 10 employees
- An employer’s family members or dependents
- Unsupervised employees on contract, task-based, or commission-based work
- Employees who are absent without pay the day before the regular holiday
What are the Types of Holidays in the Philippines?
There are two types of holidays in the Philippines, each with its own pay rules.
Regular holiday
Employees receive their full daily wage if they don’t work on a regular holiday. If they do, they get double their daily wage for the first eight hours and an additional 30% for overtime. If the holiday coincides with their rest day, they receive 200% of their salary plus an extra 30%.
These rules apply to the following holidays or dates:
- New Year’s Day (January 1)
- Maundy Thursday (to be proclaimed)
- Good Friday (to be proclaimed)
- Day of Valor/Araw ng Kagitingan (April 9)
- Labor Day (May 1)
- Independence Day (June 12)
- National Heroes Day (August 26)
- Bonifacio Day (November 30)
- Christmas Day (December 25)
- Rizal Day (December 30)
- Election Day (to be proclaimed)
- Eidul al-Fitr (to be proclaimed)
- Eidul al-Adha (to be proclaimed)
Special non-working holidays
Unless a company policy or collective bargaining agreement states otherwise, there’s no legal requirement to pay employees for not working on special non-working holidays.
If they work on a special holiday, they get an extra 30% of their daily rate for the first eight hours plus overtime pay. If it fails on their regular day off, they receive an extra 50% of their daily rate plus overtime pay.
These rules apply to the following holidays or dates:
- Chinese New Year (to be proclaimed)
- EDSA Revolution Anniversary (February 25)
- Black Saturday (to be proclaimed)
- Ninoy Aquino Day (August 21)
- All Saints’ Day (November 1)
- All Souls’ Day (November 2)
- Feast of the Immaculate Conception of Mary (December 8)
- Christmas Eve (December 24)
- New Year’s Eve/Last day of the year (December 31)
How to Compute Holiday Pay in the Philippines
The computation for holiday pay depends on the holiday type and work hours the employee rendered or did not.
Say you have an employee with an hourly rate of ₱100 (or ₱800 per day) with no cost-of-living allowance (COLA). They rendered eight hours of regular work plus two hours of overtime. Here are the formulas you should remember to compute holiday pay in the Philippines:
Regular holidays
- 8-hour shift
-
- (Daily rate + COLA) x 200%
- 800 x 200%
- ₱1,600
- 8-hour shift + overtime
-
- Hourly rate x 200% x 130% x number of hours worked
- 100 x 200% x 130% x 10
- ₱2,600
- 8-hour shift + rest day
-
- [(Daily rate + COLA) x 200%] + [30% (Daily rate x 200%)]
-
- [800 x 200%] + [30% (₱800 x 200%)]
-
- ₱2,080
- ₱2,080
- 8-hour shift + rest day + overtime
-
- Hourly rate x 200% x 130% x 130% x Number of hours worked
-
- 100 x 200% x 130% x 130% x 2
-
- ₱676
Special non-working holidays
- 8-hour shift
-
- Daily rate x 130%
-
- 800 x 130%
-
- ₱1,040
- ₱1,040
- 8-hour shift + overtime
-
- Hourly rate x 130% x 130% x Number of hours worked
-
- 100 x 130% x 130% x 2
-
- ₱338
- ₱338
- 8-hour shift + rest day
-
- Daily rate × 150%
-
- 800 x 150%
-
- ₱1,200
- ₱1,200
- 8-hour shift + rest day + overtime
-
- Hourly rate x 150% x 130% x Number of hours worked
- 100 x 150% x 130% x 2
- ₱390
What Happens if Companies Don’t Give Holiday Pay?
Articles 128 and 129 of the Labor Code state that failing to give employees their holiday pay results in penalties and liability for unpaid wages. You may need to cover attorney’s fees equal to 10% of the recovered wages.
Additionally, the Department of Labor may review your employer records, investigate, and issue orders to enforce labor standards. If you contest these orders, you must post a bond equal to the monetary award. If your non-compliance jeopardizes worker safety, the agency can halt work or suspend operations. During this time, you must continue to pay wages.
Pay Your Workers Right
Filipinos cherish their regular and special non-working holidays because it’s their chance for mini vacations and celebrations. However, these holidays can become a payroll headache for employers like you if you’re unsure about holiday pay.
Remember, following holiday pay labor laws is crucial whether your employees choose to work or rest on that day. It keeps your team happy, avoids legal issues, and boosts your image as an employer.
Let Manila Recruitment be your guide. We’re a leading recruitment agency in the Philippines with a network of over 250,000 qualified professionals, from executives to rank-and-file. We can help you confidently build your workforce and comply with all labor regulations.
Contact us today to make your recruitment journey a success.
Frequently Asked Questions
Who is entitled to holiday pay?
In general, all employees who perform work on regular workdays are entitled to receive holiday pay except for the following:
- Government employees
- Housekeepers
- Managerial employees
- Managerial staff and officers compliant with the Labor Code
- Retail and service workers in establishments with fewer than 10 employees
- An employer’s family members or dependents
- Unsupervised employees on contract, task-based, or commission-based work
What if the employee is absent before the holiday?
According to Section 6 of the Omnibus Rules Implementing the Labor Code, employees absent without pay the day before the regular holiday are not entitled to holiday pay. This applies even if they don’t work on the holiday itself.
Here are some exceptions:
- Leave with pay – The employee must be on paid leave the day before the holiday to get holiday pay.
- Non-working day or rest day – If the day before the holiday is a non-working day for the company or the employee’s scheduled rest day, they’re entitled to holiday pay as long as they worked the day before the non-working or rest day.
Is holiday pay taxable?
Only minimum-wage earners are exempt from withholding taxes on holiday pay, overtime pay, night differential pay, and hazard pay.
DISCLAIMER: The information in this webpage / blog / article / infographic we have published and the associated commentary are presented as general information and not a substitute for obtaining legal advice in this area. Manila Recruitment does not accept liability for any action taken based on the information presented or for any loss suffered as a result of reliance on the information provided.
Passionate about promoting the ingenuity of Filipino talent, Arvin is a sought-after resource person in the field of career development. He regularly delivers keynote speeches and conducts workshops throughout the Philippines, sharing his insights and strategies for improving employability and promotability.
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