What is the Holiday Overtime Pay in the Philippines

The long awaited Christmas season is coming, but what if your boss asks you to work during the holidays? Well, that’s not necessarily a bad thing: after all, the Philippine law sets a hefty pay for working during holidays, especially overtime. In this article, we will explain how much you could make for working during Christmas and other holidays, what circumstances affect the total amount of your holiday overtime pay, and how to calculate it.

What is the Holiday Overtime Pay in the Philippines?

A holiday pay is a payment employees receive for every day declared as a regular holiday or a special day by the government. According to the Labor Code, you receive payment even when you rest on such a day.

However, some employees have to work on holidays — and even work overtime, i.e. more than 8 hours. These extra hours are paid at higher rates, and the money you receive in this case is called holiday overtime pay.

Who is Entitled to the Holiday Overtime Pay?

All employees in the Philippines can benefit from the holiday overtime pay, except for such categories as (2):

• Government employees (including government-owned or controlled companies)
• Employees of retail or service businesses with 5 total workers or less
• Kasambahay (domestic workers) and other people in personal service
• Managers with two or more subordinates and the right to hire, fire, or somehow change the status of other employees
• Managers or officers who make independent decisions, execute work that requires special knowledge, complete special assignments or tasks — and devote less than 20% of their work time to unrelated activities
• Employees whose schedule is unsupervised by their employer, including those who work on a task or contract basis (paid by result).

There are also types of workers who can become eligible for the holiday overtime pay depending on the conditions below.

👉 Piece-rate workers

The holiday pay for such workers must be equal to their average wage for the last 7 days of work preceding a specific holiday. However, it should not be less than the minimum wage.

👉 Seasonal workers

Such workers receive a holiday pay (including overtime) only during the season.

Legal basis for the holiday overtime pay in the Philippines

The Labor Code of the Philippines is the main law that sets out the legal grounds for the holiday overtime pay. It defines the concept of overtime pay, establishes regular holidays, special days, and sets different rates for payments.

The law states that “every worker shall be paid his regular daily wage during regular holidays, except in retail and service establishments regularly employing less than ten (10) workers” (1). That means you get 100% of holiday pay on every regular holiday when you do not work.

According to the Labor Code, when you work on a holiday, the rate is 200%, i.e. you receive two wages for one day. Sometimes, a double holiday occurs. It is possible because some of the regular holidays are moveable, so two holidays can fall on one day. In this case, workers receive 200% of their wage for not working—and 300% of their wage for working on this day.

What is the Overtime Rate for Holidays in the Philippines?

In the Philippines, the basic overtime rate is 25%. Work beyond 8 hours on a rest day, special day, or regular holiday is paid at least 30% higher. Here are the rates:

Hourly wage calculation	Not working	Working 8 hours	8 hours + overtime
Working day	—	100% wage	100% wage + 125% wage for overtime hours
Regular holiday	100% wage	200% wage	200% wage + 260% wage for overtime hours
Double holiday	200% wage	300% wage	300% wage + 390% wage for overtime hours
Special day	—	130% wage	130% wage + 169% wage for overtime hours
Rest day	—	130% wage	130% wage + 169% wage for overtime hours
Special day plus rest day	—	150% wage	150% wage + 195% wage for overtime hours
Regular holiday plus rest day	100% wage	260% wage	260% wage + 338% wage for overtime hours

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Which holidays allow you to receive the Holiday Overtime Pay?

There are 12 regular holidays and 3 nationwide special days in the Philippine work calendar for 2023, which allow you to get additional payments for working:

Type	Holiday	Date
REGULAR HOLIDAYS	New Year’s Day	January 1
	Maundy Thursday	Movable date
	Good Friday	Movable date
	Araw ng Kagitingan (Bataan and Corregidor Day)	Monday nearest April 9
	Labor Day	May 1
	Independence Day	June 12
	National Heroes Day	Last Monday of August
	Eidul Fitr	Movable date
	Eidul Adha	Movable date
	Bonifacio Day	Monday nearest November 30
	Christmas Day	December 25
	Rizal Day	Monday nearest December 30
SPECIAL DAYS	Ninoy Aquino Day	Monday nearest August 21
	All Saints Day	November 1
	Last Day of the Year	December 31

Difference in Overtime Pay Rates

The main difference between regular holidays and special non-working days pay is the rates that apply to working on such days. Working on a regular holiday, you’ll earn x2, and a special day will bring you only 30% more. And if you work overtime, a regular holiday must be paid x2 for the first 8 hours plus x2.6 for overtime hours, and a special day pay will amount to x1.3 plus 1.69 for every overtime hour.

How to Calculate Your Holiday Overtime Pay?

To calculate the sum of overtime pay, you need to divide your standard daily wage by the actual number of working hours. For example, if your daily wage is PHP 1,200, and you work for eight hours, your hourly wage is PHP 1,200 / 8 hours = PHP 150. Let us take a look at several simple examples to show you how to determine your holiday overtime pay.

Rest Day Overtime Pay Computation

Let us say you work a shift of 12 hours on Sunday. When you work on a rest day, your daily wage is multiplied by 1.3, so your standard wage of PHP 1,200 turns into 1,200 x 1.3 = PHP 1,560. The hourly rate is then PHP 1,560 / 8 hours = PHP 195, so each overtime hour is worth PHP 195 x 1.3 = PHP 253.5. That means your pay for 4 overtime hours will be PHP 253.5 x 4 = 1,014 PHP, and the total amount of your payment for the day will be PHP 1,560 + PHP 1,014 = PHP 2,574.

Regular Holiday Overtime Pay Computation

👉 Working overtime on a regular holiday
Suppose you are to work 10 hours on Labor Day. For working 8 hours out of 10, you get 200% of your standard wage, or PHP 1,200 x 2 = PHP 2,400. That means one hour is worth PHP 2,400 / 8 hours = PHP 300. To find out your pay for every overtime hour, we need to multiply it by 1.3, so PHP 300 x 1.3 = PHP 390. It means you earn PHP 390 x 2 hours = PHP 780 for your overtime hours. So, the total payment will be PHP 2,400 + PHP 780 = PHP 3,180.

👉 Working overtime on a double holiday
When two regular holidays fall on one day, you get x3 wage for working on such a day. If your standard wage is PHP 1,200, then the daily wage for this day is PHP 1,200 x 3 = PHP 3,600, and the hourly wage is PHP 3,600 / 8 hours = PHP 450. Let us say you work 9 hours on a double holiday, so your overtime hour is worth PHP 450 x 1.3 = PHP 585. The overall payment will be PHP 3,600 + PHP 585 = PHP 4,185.

👉 Working overtime on a regular holiday that coincides with your rest day
Imagine you decide to take a shift of 12 hours on Independence Day that falls on Sunday. It means you get x2.6 of your standard wage, or PHP 1,200 x 2.6 = PHP 3,120, and the hourly rate is PHP 3,120 / 8 hours = PHP 390. Each overtime hour is worth x1.3, or PHP 390 x 1.3 = PHP 507. For four overtime hours, the holiday overtime pay will be PHP 507 x 4 hours = PHP 2,028. The final sum will be 2,028 + 3,120 = 5,148 PHP.

Special Day Overtime Pay Computation

👉 Working overtime on a special day
Let us assume your next shift lasts 10 hours on All Saints Day that falls on Tuesday. Your standard wage is multiplied by 1.3, so you get PHP 1,200 x 1.3 = PHP 1,560 for working 8 hours. The hourly wage is then PHP 1,560 / 8 hours = PHP 195. Overtime hours on a special day are worth 30% more, so each additional hour is worth PHP 195 x 1.3 = PHP 253.5, and two hours are worth PHP 507. Then, the amount you are going to receive is PHP 1,560 + PHP 507 = PHP 2,067.

👉 Working overtime on a special day that falls on your rest day
Say, All Saints Day falls on Sunday, and you work on that day. Your daily wage is multiplied by 1.5, so it amounts to PHP 1,200 x 1.5 = PHP 1,800. Then, your hourly wage for this day is PHP 1,800 / 8 hours = PHP 225. If you work 2 hours overtime, they are worth PHP 450 x 1.3 = PHP 585, so your payment for that day will be PHP 1,800 + PHP 585 = PHP 2,385.

Want to learn more? Read all about
Holiday Pay Computation in the Philippines

Common Challenges and Solutions

The concept of a “regular”, or standard, wage is one of the most confusing parts of computing the holiday overtime pay. When in doubt, refer to Art. 90 of the Labor Code: it states that the regular wage must include the total amount of cash wage before any deductions.

What are Common Mistakes in Calculating the Holiday Overtime Pay?

One of the most popular errors in calculating overtime pay is applying the increased rate defined by the law to the entire workday instead of just overtime hours. Be wary that the 1.3 multiplier applies only beyond eight hours, so the first eight hours are paid just like a standard working day would.

Impact of the Holiday Overtime Pay on Businesses and Employees

The system of holiday pay is inherently beneficial for Filipino workers. It guarantees that an employee can receive fair compensation for working on days intended for rest and festivities. The rates are high, and you do not lose any additional money when holidays, special days, or rest days collide: all multipliers get combined in such cases.

As for Filipino companies, the holiday pay legislation can be rather limiting: it means you have to pay much more for the same work if you want to quickly mobilize employees on a non-working day. Hence, many businesses in the Philippines use various ways to lower holiday overtime pay amounts. For example, some companies try to squeeze their employees into the list of exempt workers who receive no additional compensation, namely by giving them the “manager” title.

However, the law clearly states a list of requirements for any manager to be regarded as such. That means purely formal deprivation of the holiday overtime premium can become a reason for employees to go to court.

Conclusion

Use your knowledge on how the holiday overtime pay must be counted in the Philippines to plan your working shifts and finances. Do not hesitate to double-check on your payroll record as a worker. If you are an employer, be wary not to make any of the most frequent mistakes when calculating it.