Pay

How Holiday Pay Works

What holiday pay is, whether federal law requires it, how premium rates for working a holiday are calculated, and how holiday pay interacts with overtime.

2 min readUpdated

“Holiday pay” means two different things. It can mean being paid for a holiday you take off, or being paid a higher rate for working on a holiday. Both are common, but neither is required by federal law.

What federal law says

The Department of Labor explains that the Fair Labor Standards Act does not require payment for time not worked, such as vacations or federal or other holidays. Its overtime fact sheet also notes that the Act does not require overtime pay for work on holidays as such. Holiday pay comes from employer policy, employment contracts, union agreements, or in some places state or local rules.

A paid holiday is usually paid at your base rate for your normal hours.

Paid holiday = paid holiday hours × base rate

At $19.00 an hour and an 8-hour day, a paid holiday is worth $152.00.

Premium pay for working a holiday

Many employers pay time and a half or double time for hours worked on a holiday.

Holiday hours pay = holiday hours worked × rate × holiday multiplier

Example: working an 8-hour holiday at time and a half

$19.00 an hour, 32 regular hours, 8 hours on the holiday:

  1. Regular pay: 32 × $19.00 = $608.00.
  2. Holiday pay: 8 × $19.00 × 1.5 = $228.00.
  3. Total: $836.00, of which $76.00 is the holiday premium.

Holiday pay and overtime

Under federal rules, a genuine premium paid for working on a holiday, such as time and a half, can generally be credited toward overtime owed for the same week. Pay for a holiday you did not work is not pay for hours worked, so those hours generally do not count toward the 40-hour overtime threshold. The details are in 29 CFR 778.219, linked below.

Which days are holidays?

Your employer chooses which holidays it observes. The 11 US federal holidays, with their observed dates, are listed in how to count business days and built into the business days calculator.

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Sources

About this guide. Written for US employees as general information, not legal or tax advice. Rules can differ by state, employer, and contract. See our methodology and disclaimer.