Overtime Pay on Regular Holidays in the Philippines
A comprehensive legal-practitioner’s guide (updated to April 2025)
1. Statutory Foundations
| Source | Key Content |
|---|---|
| Labor Code of the Philippines | Art. 87 (Overtime Work) – 25 % premium for overtime on ordinary days and “rate prescribed under Title I, Book III plus thirty per-cent (30 %)” for overtime on special situations. Art. 94 (Right to Holiday Pay) – 200 % of the basic daily wage for the first eight (8) hours worked on a regular holiday. |
| Implementing Rules, Book III, Rule I, §4 & Rule IV, §3 | Flesh out “ordinary hourly rate” and confirm that overtime premiums are compounded on whatever rate is in force that day. |
| Department of Labor and Employment (DOLE) Advisories | Annual holiday pay advisories (e.g., Labor Advisory 23-23) confirm computation factors: • 200 % for work on a regular holiday; • 260 % when the holiday coincides with the employee’s rest day; • +30 % of the applicable hourly rate for hours beyond eight (8). |
| Jurisprudence | PNB v. Cabansag (G.R. No. 157010, 07 June 2017) – affirmed that overtime premiums are stacked, not merely added, on special-day or holiday rates. Asian Transmission v. Court of Appeals (G.R. No. 179594, 27 Jan 2021) – clarified that “compressed workweek” schemes do not dilute holiday/overtime benefits unless approved under DOLE’s flexible-work guidelines. |
2. What Counts as a “Regular Holiday”?
As of April 2025, regular holidays under Republic Act 9492 and subsequent proclamations are:
1 Jan — New Year’s Day
Maundy Thursday*
Good Friday*
9 Apr — Araw ng Kagitingan
1 May — Labor Day
12 June — Independence Day
National Heroes Day* (last Mon of Aug)
30 Nov — Bonifacio Day
25 Dec — Christmas Day
30 Dec — Rizal Day
Eid’l Fitr* and Eid’l Adha* (movable; announced by presidential proclamation)
*Movable dates or subject to “holiday economics” shifting do not affect the premium rates; what matters is the specific calendar day proclaimed as the regular holiday.
3. Who Is Covered?
| Category | Coverage Notes |
|---|---|
| Rank-and-file employees (regardless of status) | Entitled to both holiday pay and overtime differentials. |
| Managerial & Officers (Art. 82) | Not covered by the overtime rule, but still receive the 200 %/260 % holiday rate if they actually work. |
| Field personnel | Holiday pay exempt, overtime pay exempt unless employment contract expressly grants it. |
| BPOs, hospitals & similar 24/7 undertakings | No exemption; they follow the same multipliers even when they elect an “offset-day” scheme. |
4. How to Compute – The Formulas
Step 1: Identify the applicable base hourly rate
Hourly Rate = (Basic Daily Wage ÷ 8)Step 2: Apply the holiday multiplier for the first eight (8) hours
• Regular Holiday worked:Basic Daily Wage × 200 %
• Regular Holiday + Rest Day:Basic Daily Wage × 260 %Step 3: Compute overtime premium for hours beyond eight (8)
• Regular Holiday OT:Hourly Rate × 200 % × 130 % × OT-Hours
• Holiday + Rest Day OT:Hourly Rate × 260 % × 130 % × OT-Hours
4.1 Numerical Examples (Daily-Paid Worker)*
Assume ₱610 statutory minimum daily wage in NCR (Wage Order NCR-25, 01 Jan 2025).
| Scenario | Pay for first 8 h | Hourly Rate | OT Multiplier | Pay per OT hour |
|---|---|---|---|---|
| Holiday work | ₱610 × 200 % = ₱1,220 | ₱152.50 | 200 % × 130 % = 260 % | ₱152.50 × 260 % = ₱396.50 |
| Holiday + Rest Day work | ₱610 × 260 % = ₱1,586 | ₱190.75 | 260 % × 130 % ≈ 338 % | ₱190.75 × 338 % ≈ ₱645.74 |
*Monthly-paid employees receive their daily-rate equivalents by dividing the monthly salary by 22.92 (the legal divisor) before applying the same multipliers. Their monthly pay already includes 12 regular holidays; only the actual work portion (200 % or 260 %) and the overtime premium are added on top.
5. Related Pay Issues
| Issue | Treatment |
|---|---|
| Night-shift differential (NSD) | Add 10 % of the holiday hourly rate for work between 10 p.m. and 6 a.m. |
| Hazard pay | Apply the 25 % or 15 % hazard premium on the holiday-adjusted basic pay, then compute OT on the higher amount. |
| Taxability | Holiday pay and OT are taxable compensation income unless total annual compensation falls below the ₱250,000 threshold (TRAIN Law, 2018). |
| Pag-IBIG & SSS contributions | Computed on “actual monthly compensation”; overtime and holiday premiums are included in the contribution base up to the respective ceilings. |
6. Employer Compliance & Sanctions
- Non-payment is an unlawful deduction and a violation of Art. 113.
- Penalties under Art. 303: fine ₱100 – ₱10,000, imprisonment 3 months – 3 years, or both, plus payment of double indemnity (Art. 305).
- DOLE Regional Offices conduct routine inspections; findings create a prima facie presumption of liability.
7. Frequently Litigated Questions
| Problem Area | Leading Rulings & DOLE Stance |
|---|---|
| “No work, no pay” vs. holiday premium | Cebu Shangri-La v. Ybanez (G.R. No. 159408, 10 Aug 2016): an employee who is absent without pay on both the holiday and the immediately preceding workday forfeits the 200 % benefit. |
| Compressed Workweek (CWW) | Asian Transmission (supra): Holiday OT is still due when total hours exceed 48 hours in one week despite a CWW agreement. |
| Exempt status challenges | DOLE D.O. 147-15 stresses that “managerial” exemption hinges on primary duty test, not titles. Misclassification leads to retroactive OT and holiday-pay awards. |
8. Practical Checklist for Employers
- Tag holidays correctly in the payroll system (distinguish regular vs. special non-working).
- Capture actual work hours via electronic timekeeping; manually signed logs are the weakest defense.
- Configure OT multipliers by layer (holiday ⇒ rest-day ⇒ night diff ⇒ hazard).
- Issue a written work-on-holiday order; employee consent is not required for operations exigencies, but documentation beats disputes.
- Keep payslips itemized (Art. 116-B, as amended by R.A. 10396).
9. Take-Away
Overtime rendered on a regular holiday is paid at least 260 % of the basic hourly wage, and 338 % when the holiday falls on the worker’s scheduled rest day. These figures reflect a statutory intent to (a) discourage work on holidays, and (b) fairly compensate employees who render service on days meant for rest and commemoration. Correct application hinges on multiplicative stacking of premiums, strict record-keeping, and awareness of evolving wage orders and DOLE advisories.
Bottom line: Treat overtime on regular holidays as the costliest labor‐cost tier; plan staffing and payroll budgets accordingly, and always document hours worked.