Holiday pay is a key part of employee compensation, ensuring workers are fairly compensated for time off or work done on holidays. However, calculating holiday pay under the labor code can be complex, especially with different rates for regular and special non-working holidays. Employers must stay informed to ensure DOLE compliance and avoid payroll errors.

Paid Holidays and Their Compensation

The Department of Labor and Employment (DOLE) has set specific guidelines for paid holidays by law:

• Regular Holidays: Employees are entitled to receive 100% of their daily wage, even if they don’t work. If they do work, they must be paid 200% of their daily wage.
• Special Non-Working Holidays: If an employee works on a special holiday, they should receive an additional 30% on top of their daily wage.
• Overtime on Holidays: Employees working beyond eight hours on a holiday should receive an additional 30% on their hourly overtime rate.

Sample Holiday Pay Computation

For an employee earning ₱1,000 per day who works on a regular holiday:

• If Employee Does Not Work: ₱1,000 (100% pay)
• If Employee Works: ₱1,000 × 200% = ₱2,000
• Holiday Overtime Pay (2 extra hours): [(₱1,000 ÷ 8) × 1.25] × 30% × 2 = ₱406.25
• Total Pay for the Day: ₱2,000 + ₱406.25 = ₱2,406.25  ‍

Ensuring Accuracy with PAYDAY

Managing holiday pay manually isn’t just tedious—it can lead to costly errors, compliance risks, and unnecessary administrative strain. PAYDAY takes the guesswork out of payroll processing, ensuring accurate holiday pay computation without added stress.

With an automated system, you minimize disputes, ensure compliance with DOLE regulations, and keep your workforce satisfied with timely and correct payouts. Instead of spending hours on calculations, you can allocate resources to growing your business and improving operations.

Avoid penalties, payroll discrepancies, and inefficiencies—empower your company with payday.ph today!