Holiday pay has been defined as payment of the regular daily wage for any unworked regular holiday. However, not all employees are entitled to holiday pay. The benefit does not apply to:

1. Government employees
2. Those of retail and service establishments regularly employing less than ten (10) workers;
3. Househelpers and persons in the personal service of another;
4. Managerial employees provided they meet the conditions under the Labor Code
5. Officers or members of a managerial staff provided they meet the conditions under the Labor Code
6. Field personnel and other employees whose time and performance are unsupervised by the employer, including those who are engaged on task or contract basis, purely commission basis or those who are paid a fixed amount for performing work irrespective of the time consumed in the performance thereof.

In paying employees holiday pay in the Philippines, you need to know the different kinds of holidays namely a) Regular holiday b) Special non-working day and c) Special Working day.

As per Memorandum Circular No. 1 issued by the Department of Labor & Employment on 08 March 2004, the computation for holiday pay is as follows:

I. Computation of holiday pay for regular holidays.

A. If it is an employee’s regular workday
1. If unworked – 100%
2. If worked – 1st 8 hours – 200% while the excess of 8 hours – plus 30% of hourly rate on said day

B. If it is an employee’s rest day
1. If unworked – 100%
2. If worked – 1st 8 hours – plus 30% of 200% while excess of 8 hours – plus 30% of hourly rate on said day

II. For declared Special Non-Working Day, the following rules shall apply:

A. If it is an employee’s regular workday
1. If unworked – No pay, unless there is a favorable company policy, practice or collective bargaining agreement (CBA) granting payment of wages on special days even if unworked.
2. If worked – 1st 8 hours – plus 30% of the daily rate of 100% while excess of 8 hours – plus 30% of hourly rate on said day

B. Falling on the employee’s rest day
1. If unworked – No pay, unless there is a favorable company policy, practice or collective bargaining agreement (CBA) granting payment of wages on special days even if unworked.
2. if worked -1st 8 hours – plus 50% of the daily rate of 100% while excess of 8 hours – plus 30% of hourly rate on said day

III. For those declared as special working holidays, for work performed, an employee is entitled only to his basic rate. No premium pay is required since work performed on said days is considered work on ordinary working days.

Nicolas & De Vega Law Offices is a full service law firm in the Philippines. You may visit us at the 16th Flr., Suite 1607 AIC Burgundy Empire Tower, ADB Ave., Ortigas Center, 1605 Pasig City, Metro Manila, Philippines. You may also call us at +632 4706126+632 4706130+632 4016392.

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Our Legal Advice page is composed of many articles, FAQs, guides and advice on Philippine Law. These cover civil law, commercial and corporate law, criminal law, intellectual property law (trademark, copyright, patent, PCT and others), family law, inheritance and succession, competition and antitrust law, data privacy, local and international taxation, and many others. 

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