Computation of holiday pay

During regular holidays, 100% pay if there is no work and 200% pay if there is work. During double holidays or two regular holidays falling on the same day, 300% pay if there is work.

1. Computation

These are the steps on how to compute for holiday pay.

The following are the assumptions:

1) The covered employee’s daily rate is Php1,00.00.

2) The covered employee works for 8 hours.

Before proceeding, note that there are different ways to compute depending on the applicable circumstances.

COMPUTATION 1: No work is done on a regular holiday
If there is no work on a regular holiday, a covered employee is entitled to a holiday pay of 100% daily wage.
Formula:
100% holiday pay + day’s wage = day’s wage with holiday pay
Sample computation:
Php1,000.00 + Php0.00 (since no work is done) = Php1,000.00
COMPUTATION 2: Work is done on a regular holiday
If there is work performed on a regular holiday, a covered employee is entitled to a holiday pay of 100% daily wage plus his wage for that day. (If the covered employee is compensable for his entire day’s work, he is entitled to 100% of his day’s wage. If he is tardy or late, then he is entitled to his corresponding pay for the day.)
Formula:
100% holiday pay + day’s wage = day’s wage with holiday pay
Sample computation:
Php1,000.00 + Php1,000.00 = Php2,000.00
COMPUTATION 3: No work is done on a regular holiday.
If there is no work performed on a double holiday, a covered employee is entitled to a holiday pay of 200% daily wage.
Formula:
200% holiday pay (for holiday 1 and holiday 2) + 1 day’s wage = day’s wage with holiday pay
Sample computation:
Php2,000.00 (since it is a double holiday) + Php0.00 (since no work is done) = Php3,000.00
COMPUTATION 4: Work is done on a regular holiday pay.
If there is work performed on a double holiday, a covered employee is entitled to a holiday pay of 200% daily wage plus his wage for that day.
Formula:
200% holiday pay (for holiday 1 and holiday 2) + 1 day’s wage = day’s wage with holiday day
Sample computation:
Php2,000.00 (since it is a double holiday) + Php1,000.00 = Php3,000.00

2. Divisors

The divisor assumes an important role in determining whether or not holiday pay is already included in the monthly paid employee’s salary and in the computation of his daily rate. (Union of Filipro Employees v. Vivar, En Banc, G.R. No. 79255, 20 January 1992)

Chartered Bank Employees Association v. Ople, En Banc
G.R. No. L-44717, 28 August 1985
Chartered Bank, in computing overtime compensation for its employees, employs a “divisor” of 251 days. The 251 working days divisor is the result of subtracting all Saturdays, Sundays and the ten (10) [now 13] legal holidays form the total number of calendar days in a year. If the employees are already paid for all non-working days, the divisor should be 365 and not 251.
Producers Bank of the Philippines v. NLRC
G.R. No. 100701, 28 March 2001
The divisor of 314 is arrived at by subtracting all Sundays from the total number of calendar days in a year, since Saturdays are considered paid rest days, as stated in the inter-office memorandum. Thus, the use of 314 as a divisor leads to the inevitable conclusion that the ten legal holidays are already included therein.
Leyte IV Electric Cooperative, Inc. v. LEYECO IV Employees Union-ALU
G.R. No. 157775, 19 October 2007
The use of a divisor that was less than 365 days cannot make the employer automatically liable for underpayment of holiday pay. In said case, the employees were required to work only from Monday to Friday and half of Saturday. Thus, the minimum allowable divisor is 287, which is the result of 365 days, less 52 Sundays and less 26 Saturdays (or 52 half Saturdays). Any divisor below 287 days meant that the employees were deprived of their holiday pay for some or all of the ten [now 13] legal holidays. The 304-day divisor used by the employer was clearly above the minimum of 287 days. The use of a divisor that was less than 365 days cannot make the employer automatically liable for underpayment of holiday pay. In said case, the employees were required to work only from Monday to Friday and half of Saturday. Thus, the minimum allowable divisor is 287, which is the result of 365 days, less 52 Sundays and less 26 Saturdays (or 52 half Saturdays). Any divisor below 287 days meant that the employees were deprived of their holiday pay for some or all of the ten legal holidays. The 304-day divisor used by the employer was clearly above the minimum of 287 days.

Related

Holiday pay

Computation of holiday pay

FAQ: Holiday pay

Cases on: Holiday pay

References

Presidential Decree No. 442, a.k.a. Labor Code of the Philippines

Book IIII, Omnibus Rules Implementing the Labor Code

2022 DOLE-BWC Handbook on Workers’ Statutory Monetary Benefits

⦁ Cited Labor Law Jurisprudence (a.k.a. Supreme Court Decisions)

Disclaimer: All information is for educational and general information only. These should not be taken as professional legal advice or opinion. Please consult a competent lawyer to address your specific concerns. Any statements or opinions of the author are solely his own and do not reflect that of any organization he may be connected.

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