What is holiday pay in the Philippines? Holiday pay is a mandatory benefit under the Philippine Labor Code requiring employers to compensate employees at a premium rate on declared regular and special non-working holidays. Rates vary depending on the holiday type and whether the employee works or not. Non-compliance is treated as a wage violation by DOLE.
Under Articles 93 and 94 of the Philippine Labor Code, every covered rank-and-file employee is entitled to holiday pay on regular and special non-working holidays. The rates differ by holiday type and by whether the employee worked. Getting the multiplier wrong — even by one employee, one holiday — constitutes a wage violation that DOLE can assess back pay on with no statute of limitations waiver.
This guide covers the correct rates under the Labor Code, the most common employer computation mistakes, and what compliance looks like under DOLE's 2026 inspection posture.
Regular Holidays vs Special Non-Working Holidays: The Difference That Changes the Rate
The Philippine Labor Code distinguishes between two types of public holidays, and the computation rules are different for each.
Regular holidays include Independence Day (June 12), Rizal Day, Christmas Day, New Year's Day, Araw ng Kagitingan, Labor Day, National Heroes Day, Bonifacio Day, and Eid al-Fitr and Eid al-Adha (when proclaimed). Employees are entitled to pay even if they do not work.
Special non-working holidays follow a "no work, no pay" principle — employees receive no compensation if they do not report, unless the employer has a more favorable policy.
Holiday Pay Rates: The Complete Computation Table
The following rates apply to rank-and-file employees under the Philippine Labor Code. "Daily rate" refers to the employee's regular daily basic pay.
Regular Holidays
| Scenario | Pay Rate |
|---|---|
| Employee does NOT work | 100% of daily rate (paid holiday) |
| Employee WORKS on the holiday | 200% of daily rate (basic pay + 100% premium) |
| Employee works on rest day that falls on a regular holiday | 260% of daily rate |
| Employee works overtime on a regular holiday | 200% + 30% of hourly rate per overtime hour |
Special Non-Working Holidays
| Scenario | Pay Rate |
|---|---|
| Employee does NOT work | No pay (no work, no pay rule applies) |
| Employee WORKS on the special holiday | 130% of daily rate |
| Employee works on rest day that falls on a special holiday | 150% of daily rate |
Most Common Holiday Pay Mistakes Philippine Employers Make
Mistake 1: Not paying non-working employees on regular holidays. On a regular holiday, employees who do not report to work are still entitled to 100% of their daily rate. "No work, no pay" applies to special non-working holidays only — not regular holidays.
Mistake 2: Applying the wrong rate to rest day holidays. When a regular holiday falls on an employee's rest day and they work, the rate is 260% — not 200%. Many payroll processors miss this distinction.
Mistake 3: Computing holiday pay on gross pay instead of basic daily rate. Holiday pay rates apply to the basic daily rate only — not the employee's total compensation including allowances, overtime, or premium pay.
Mistake 4: Not documenting the computation for audit purposes. DOLE expects employers to maintain payroll records that show how holiday pay was computed per employee. If a labor complaint is filed, undocumented computations work against the employer.
DOLE Labor Advisory No. 10-2026: YAKAP Registration Requirements
On June 3, 2026, Labor Secretary Francis Tolentino signed Labor Advisory No. 10, Series of 2026, requiring all private-sector employers to facilitate worker registration under PhilHealth's Yaman ng Kalusugan Program (YAKAP). The advisory was issued under Article 5 of the Labor Code and Republic Act No. 11223 (Universal Health Care Act).
Under the advisory, employers are required to:
- Coordinate with PhilHealth to facilitate onsite YAKAP registration activities in the workplace
- Assist workers with online registration through the eGov app and the PhilHealth Member Portal
- Grant reasonable time off or excused absences to employees registering at PhilHealth offices or attending first-patient consultations at YAKAP clinics
Excused absences under the advisory are subject to existing company policies, and employees are expected to give prior notice. DOLE regional offices have been directed to integrate YAKAP compliance into standard labor inspections — meaning inspectors will check for this alongside standard labor standards during visits.
What Non-Compliance with Holiday Pay Actually Costs
Under Articles 128 and 129 of the Labor Code, failure to pay correct holiday pay is treated as a wage violation. The consequences are:
- Full back pay for the underpaid amount, covering all affected employees and all underpaid periods
- Attorney's fees equal to 10% of the total recovered wages, awarded to the employee
- DOLE compliance orders requiring the employer to correct and document the violation
- Work stoppage orders in cases where non-compliance is found to jeopardize worker safety — during which the employer must continue paying wages
Employees can file money claims directly with DOLE or the National Labor Relations Commission (NLRC). DOLE labor inspections actively pull payroll records to verify holiday pay computations. With YAKAP advocacy now integrated into inspection visits, employers should expect more frequent touchpoints with regional labor offices in 2026.
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Book a free demoFrequently Asked Questions
Are employees paid if they do not work on a regular holiday in the Philippines?
Yes. On a regular holiday, all covered employees are entitled to 100% of their regular daily rate even if they do not report to work. This is different from special non-working holidays, where the "no work, no pay" rule applies unless the company policy provides otherwise.
What is the holiday pay rate for employees working on a regular holiday?
Employees who work on a regular holiday receive 200% of their regular daily rate — their basic pay for the day plus an additional 100% premium. If the holiday falls on their rest day and they work, the rate increases to 260%.
What is the difference between a regular holiday and a special non-working holiday?
Regular holidays are fixed under the law (e.g., Independence Day, Christmas, Rizal Day) and employees are paid even if they do not work. Special non-working holidays (e.g., EDSA People Power Anniversary, All Saints' Day) follow "no work, no pay" — employees only receive pay if they report.
How should holiday pay be computed for employees on flexible work schedules?
For employees on flexible or compressed workweek arrangements, holiday pay computation depends on the specific DOLE-approved schedule. The applicable daily rate is based on the equivalent daily rate in the arrangement, not the standard 8-hour rate. Review the specific arrangement against current DOLE guidelines or consult your HR counsel.
What is the penalty for not paying the correct holiday pay?
Under Articles 128 and 129 of the Labor Code, the employer is liable for the full unpaid or underpaid amount across all affected employees, plus attorney's fees equal to 10% of total recovered wages. DOLE can issue a compliance order and, in cases where non-compliance jeopardizes worker welfare, suspend business operations — during which the employer must continue to pay wages. Employees may file money claims directly with DOLE or the NLRC without needing to hire a lawyer.
Do contractual and part-time employees receive holiday pay?
Yes, provided they are covered employees under the Labor Code. Contractual and project-based employees on a daily or hourly rate are entitled to holiday pay. Part-time employees receive holiday pay proportionate to their regular schedule. Employees paid purely on commission may be exempt under certain conditions — consult DOLE guidelines for commission-based arrangements.
Written by YAHSHUA HRIS Team · Last updated June 2026
This article reflects the Philippine Labor Code and current DOLE advisories. For legal advice specific to your workplace, consult a licensed labor law practitioner or your DOLE regional office.