Guide to Holiday Wages in the Philippines

Holidays are a significant aspect of Philippine culture; employers have a particular responsibility to uphold the rules enforced by the Labor Code of the Philippines, specifically on how to issue holiday pay to their employees in the Philippines. 

Laws in the Philippines require employers to compensate employees during specific dates despite not reporting to work. This article presents a guide on correctly calculating your employee’s wages for proper payment during holidays. 

Importance of Holiday wage pay 

Adhering to the country’s holiday pay rules is an essential aspect of the corporate environment, and, as an employer, you are duty-bound to pay your employees properly, lest you get penalised for violating the holiday rules enforced by the country’s Labor Code and avoid incurring salary disputes with your workers. In contrast, as an employee, it is your right to be correctly compensated if you decide to work during a holiday for a pay bonus. 

To better ensure accurate and timely holiday wage payment, companies can work with a payroll outsourcing service company like Forvis Mazars. These firms also occasionally provide updates reporting on upcoming holiday wages or taxes. This short guide aims to help employers correctly issue holiday wage pay to their employees affected by Philippine holidays. 

What is a Holiday Pay in the Philippines? 

Holiday pay is defined as paying employees a regular daily average wage during an unworked holiday. 
It is a legislated benefit enacted as part of the state’s constitutional imperative toward protecting Filipino labour. “It is also intended to enable the worker to participate in the national celebrations held during the days identified with great historical and cultural significance, “as mentioned by the Asian Transmission Corporation v. CA (Commonwealth Act), G.R. No. 144664, 15 March 2004). 

In the Philippines, holiday pay is considered a legally mandated benefit that all employers must pay to their employees on holidays, whether they worked during that time. 

But there are certain employees exempt from holiday pay; this benefit does not apply to the following employees: 

• Government Employees 
• Housekeepers or individuals personally serving another (Kasambahays) 
• Managerial Employees 
• Officers and staff members of managerial staff that are compliant with the Labor Code conditions 
• Retail workers and service establishments with less than ten (10) workers 
• The Employer’s family members are currently dependent on the employer for support 
• Employees under contract, undergoing a task, or those currently under commission and are unsupervised by their respective employers 
• Note that there is a difference in the payments rates for the various kinds of holidays in the Philippines, divided between regular holidays and special non-working holidays. 

Special Employee groups 

Holiday wage pay rules are applied differently toward certain specific groups in the company. These include the following: 

Piece-rate workers must be given holiday pay that must not be less than their daily earnings for the last seven (7) days of actual work after the preceding regular holiday. However, the holiday cannot be less than the applicable minimum wage rate, as said in the Department of Labour and Employment (DOLE) Handbook, Rule IV, Book III, Omnibus Rules Implementing the Labour Code. 

Seasonal Workers are not entitled to holiday wages during regular holidays in the off-season. 

Workers without working days  are entitled to holiday pay. 

Computing the Holiday Pay in the Philippines 

The computation for the holiday wage rates was issued by the Department of Labor and Employment (DOLE) on Memorandum Circular No. 1 of March 8, 2004. It is currently implementing two separate groups of holidays rules, one for regular holidays and another for special non-working holidays. 

A. Employee wage payment for regular holidays 

President Ferdinand R. Marcos Jr. issued Proclamation No. 727, s. 2024 declaring the regular holidays and special (non-working) days for 2025. The proclamation was signed by Executive Secretary Lucas P. Bersamin on 30 October 2024 and was published in the Official Gazette on 31 October. 

It states that the regular holidays for 2025 are as follows: 

The proclamations declaring Eidul Fitr and Eidul Adha as national holidays shall be issued after the National Commission on Muslim Filipinos recommends to the Office of the President the actual dates on which these holidays shall fall.

President Marcos declared Eidul Fitr as a regular holiday throughout the country on April 1, 2025 through Proclamation No. 839, s. 2025.

Employees who did not report for work during a regular holiday are still beholden to receiving their full 100% salary for that day and should not be given reduced pay for not working during the holiday. 

Employees who reported for work on a regular holiday must be paid double their daily wage. 

 The computation for the pay wage is as follows:   

Normal Hours 

Employees who worked during a regular holiday are entitled to 200% of their daily wage for the first eight (8) hours. If the employee worked overtime for 2 hours in excess of eight (8) hours performed on a regular holiday plus 30% of the hourly rate on said days. 

Overtime Hours 

Employees who report for work on their rest day during a regular holiday will be given a 30% bonus of their 200% salary and 200% compensation. 

Rest day hours 

Employees who report for work on a regular holiday that falls on their scheduled rest day are entitled to holiday pay of 260% of their daily basic wage rates. 

Rest day with overtime hours 

B. Special Holiday Pay Computation 

The proclamation also states that there would be eight (8) non-working holidays for 2025.  
These are as follows: 

*In Proclamation No. 729, s. 2024, the President included 27 July 2025 as a Special (Non-Working) Day to commemorate Iglesia ni Cristo’s Founding Anniversary.

Additional Special (Non-Working) Days 

Employees who did not report for work during a special non-working holiday are subject to the “no work, no pay rule” this will take effect until the employer implements a policy or collective bargaining agreement (CBA) allowing payment during these dates. 

Employees who report for work on a special holiday are entitled to an additional 30% of their daily basic wage or a total of 130%.  

Normal Hours 

 If the employee worked overtime for 2 hours in excess of eight (8) hours performed on a special holiday plus 30% of the hourly rate on said days. The computation is as follows: 

Overtime Hours 

Employees who report for work on their rest day (Saturday or Sunday) during a special non-working holiday will be given an added 50% bonus of their basic wage for their first eight (8) hours. The computation for this instance can be seen below: 

Rest day hours 

Employees who report for work on a special holiday that falls on their scheduled rest day are entitled to an additional 30% of their daily basic wage or a total of 195%.  

Holiday wage pay Rules 

A. Holiday Absences 

Suppose an absent employee is paid on the workday once the day after a regular holiday. In that case, they are entitled to holiday pay, as said in the DOLE Handbook, Rule IV, Book III, Omnibus Rules Implementing the Labor Code. 

If an employee is absent the day after a regular holiday, they will be paid if they applied for their leave credits for that day’s absence and were approved by the management. If no leave credit is applied, they will not be paid. If they are not paid on the workday after the holiday, they will not be spent. 

The same rule on absences applies to the following regular holidays or two/more holidays lining up after another (e.g., Maundy Thursday and Good Friday). When absent employees are paid after the regular holiday, they will be paid for the regular holidays. If they are not paid after a regular holiday, they will not be given a holiday for the following regular holidays. 

But in the case when an absent employee is not paid on the workday after a regular holiday but reports for work on the first regular holiday during successive regular holidays, they will be paid for the next holiday/s even without having to work. 

B. Temporary Periodic Shutdown during Holidays 

Because of Covid-19, DOLE quoted a piece in their handbook, saying that “In cases of temporary or periodic shutdown and temporary cessation of work of an establishment, as a yearly inventory or when the repair or cleaning of machinery and equipment is undertaken, the regular holidays falling within the period shall be compensated following the rules implementing the Labor Code, as amended.” 

DOLE then explains that employers can use a temporary work suspension (TWS) to suspend work on their establishment for a legitimate business decision; it cannot be exceeded by six (6) months. 

C. On holiday wage taxability 

Regarding taxability, it is said that the minimum wage workers (MWE) are exempt from paying their withholding taxes for their holiday pay. This rule also applies to benefits such as overtime pay, hazard pay, and night differential pay. 

Forvis Mazars payroll services in the Philippines  

Keeping up with changes to payroll regulations while ensuring precise computations and timely releasing can be challenging.  Our payroll services are designed to meet the requirements of companies that are seeking accurate, on-time, and secure payroll outsourcing services. Whether your headcount in the Philippines is one or one thousand, our team can provide tailored solutions that maintain confidentiality and protect employee data. We are present in over 100 countries, enabling you to scale with efficiency internationally. 

To contact us, you can click the link HERE or click on the box below this page.