Calculates your mandatory 13th month pay based on your basic salary, months worked, and unpaid absences. Compliant with PD 851 and TRAIN Law tax exemption.
Holiday Pay in the Philippines
In the Philippines, employees are entitled to premium pay when they work on official holidays. The Department of Labor and Employment (DOLE) categorizes holidays into two types: Regular Holidays and Special Non-Working Holidays. Each type has a different pay rate. This calculator helps you determine the correct amount based on the employee's daily rate, the type of holiday, and whether they worked.
How Holiday Pay is Calculated
The calculation follows DOLE's prescribed rules:
- Regular Holidays (e.g., New Year's Day, Independence Day, Christmas Day): If the employee works, they are paid 200% of their daily rate. If they do not work, they are still paid 100% of their daily rate.
- Special Non-Working Holidays (e.g., Chinese New Year, EDSA Revolution Anniversary): If the employee works, they are paid 130% of their daily rate. If they do not work, the general principle is "no work, no pay." However, some companies may have a policy, practice, or a collective bargaining agreement (CBA) that provides pay for these days off. The calculator allows you to specify this.
- Overtime on Holidays: For any overtime hours worked on the holiday, the employee is entitled to their holiday hourly rate (daily rate × holiday percentage ÷ 8) plus an additional 30% premium on top of that holiday hourly rate.
Step-by-Step Example
Let's calculate the pay for an employee with a daily rate of PHP 1,000 who works on a Regular Holiday for 8 hours plus 2 hours of overtime.
- Base Holiday Pay (for 8 hours): The rate for a Regular Holiday is 200%.
PHP 1,000 × 200% = PHP 2,000. - Holiday Hourly Rate: PHP 2,000 ÷ 8 hours = PHP 250 per hour.
- Overtime Pay: Overtime premium is 30% on top of the holiday hourly rate.
2 hours × PHP 250 × (100% + 30%) = 2 × PHP 250 × 130% = PHP 650. - Total Holiday Pay: PHP 2,000 + PHP 650 = PHP 2,650.
Common Scenarios
- Work on a Special Holiday: An employee with an PHP 800 daily rate works on a Special Non-Working Holiday. They earn PHP 800 × 130% = PHP 1,040.
- Day Off on a Regular Holiday: An employee does not work on a Regular Holiday. They receive their full daily rate (PHP 1,000) as a paid holiday.
- Special Holiday Not Worked (No Company Pay): An employee does not work on a Special Non-Working Holiday, and the company does not have a policy to pay for the day off. They receive PHP 0.
- Special Holiday Not Worked (With Company Pay): An employee does not work on a Special Non-Working Holiday, but company policy guarantees pay. They receive 100% of their daily rate (PHP 900).
After Calculating: The Employment Contract
Clarity on holiday pay should be part of a well-drafted employment contract. After using this calculator, consider preparing or updating an Employment Contract to formally document the employee's daily rate, work schedule, and entitlement to statutory benefits like holiday pay. This protects both employer and employee and ensures compliance with Philippine labor laws.