Holiday pay: how it works and how to calculate it

The short answer: holiday pay is either your regular pay for a paid day off or a premium rate, often time and a half or double time, if you work that day.

• Not required by federal law for most private jobs
• The FLSA leaves it to agreement between employer and employee
• Federal employees, union contracts and some state rules differ
• How to calculate it and questions to ask your employer
• Next step: Plan it with the Paycheck Budget Spreadsheet ($5.99).

Holiday pay is what your employer pays you for a holiday: either your regular pay for a paid day off, or a premium rate, often time and a half or double time, if you work that day. Many people assume holiday pay is required by law. For most private jobs in the US it is not. The Department of Labor says the FLSA does not require payment for time not worked, such as holidays, and that it is a matter of agreement between employer and employee. Below is how holiday pay usually works, how to calculate it, which holidays are commonly paid, the rules for federal workers and how to plan your budget around holiday paychecks.

How holiday pay works

There are two kinds of holiday pay, and an employer may offer one, both or neither.

Your employee handbook, offer letter or union contract is where the real answer lives. If the policy is in writing, your employer is expected to follow it. Not sure whether your office, bank or the stock market is even open on January 1? Our New Year's Day guide lists the closures.

Is holiday pay required by law?

Under federal law, no, for most private employers. The Fair Labor Standards Act sets minimum wage and overtime rules, but it does not require pay for holidays you do not work. The Department of Labor's overtime page also says the FLSA does not require overtime pay for work on Saturdays, Sundays, holidays or regular days of rest, unless overtime is worked on those days.

There are a few exceptions:

• Some federal contracts. Under the Service Contract Act and the Davis-Bacon and Related Acts, holiday pay may be required when the contract's wage determination says so.
• Federal employees. Holidays and holiday premium pay are set by federal law (see below).
• State and local rules. A few states have special pay rules for certain workers on certain holidays. Check your state labor department.
• Union contracts. Collective bargaining agreements often require paid holidays and premium rates.

How to calculate holiday pay

Use your regular rate and the multiplier in your employer's policy.

Holiday pay and overtime

The FLSA applies on a workweek basis: overtime is owed for hours actually worked over 40 in a workweek. Under federal rules, paid hours for a holiday you did not work generally do not count toward those 40 hours. Hours you actually work on the holiday do count. So in a Thanksgiving week where you are paid for Thursday off and work 40 hours on the other days, you would usually get 40 regular hours plus 8 holiday hours, with no overtime. Some employers are more generous, so check your policy.

Which holidays usually get holiday pay?

Private employers pick their own paid holidays. Most start with the six biggest and add more.

Halloween is not on the list. For what is open and closed on October 31, see is Halloween a bank holiday?

Good Friday is not a federal holiday, but some employers give the day off; see Good Friday 2027. When a holiday falls on a Saturday, like Juneteenth 2027, federal workers get the Friday before.

Planning ahead for 2027? See our guides to MLK Day 2027, Labor Day 2027 and the Columbus Day holiday for dates and what is closed.

Dates are from OPM's federal holiday schedule. Many employers also offer a floating holiday you can use for a birthday or a religious holiday.

Holiday pay for federal employees

Federal holidays are set by law, 5 U.S.C. 6103, and the Office of Personnel Management publishes the dates each year. There are 11 federal holidays. When a holiday falls on a Saturday, most federal employees get the Friday before as their holiday for pay and leave purposes. When it falls on a Sunday, they get the following Monday. For 2027, that means Independence Day is observed Monday, July 5, and Christmas is observed Friday, December 24. OPM also notes that employees who are required to perform work on a holiday are entitled to holiday premium pay.

New Year's Day moves when it falls on a weekend; see when is New Years? for 2027 and 2028.

State and local government workers follow their own state's holiday rules, which often match the federal list with a few changes.

Holiday pay terms you will see

Handbooks use a lot of overlapping words. Here is what the common ones usually mean.

• Paid holiday: a day off with your regular pay.
• Holiday premium pay: a higher hourly rate for working on a holiday, such as 1.5x or 2x.
• Floating holiday: a paid day off you choose, often for a birthday or a religious or cultural holiday not on the company list.
• In-lieu-of holiday: a substitute day off when a holiday falls on a weekend or your regular day off.
• Holiday eligibility rule: a condition such as working your last scheduled shift before and your first shift after the holiday to get paid for it.
• PTO: paid time off from a general bank. Some employers count holidays separately; others expect you to use PTO for holidays.

Knowing which term applies tells you whether a holiday adds to your paycheck, keeps it the same or uses up your PTO.

Questions to ask about your holiday pay policy

• Which holidays are paid, and is there a floating holiday?
• Do part-time employees get holiday pay, and is it prorated?
• Is there a waiting period before new hires get paid holidays?
• What is the premium rate for working a holiday?
• What happens when a holiday falls on my day off or during vacation?
• Do I have to work the scheduled day before and after to get paid for the holiday?

Ask by email if the answer is not in the handbook, so you have it in writing.

Budgeting around holiday paychecks

Holidays change paychecks in two ways. A holiday premium can make a check bigger, which is a good chance to cover December costs or add to savings. And a holiday on payday can move your deposit a day earlier or later, which matters when rent or a car payment is due the same day.

1. Mark paid holidays on your calendar with the expected pay rate.
2. Estimate the extra. If you will work Christmas at time and a half, figure the bonus amount before you spend it.
3. Give the extra a job. Put it toward holiday gifts, an end-of-year bill or savings.
4. Watch payday shifts. If a payday lands on a holiday, plan as if the money arrives on the later date.
5. Unpaid holidays need a plan too. If your job does not pay holidays, a short week in November or December means a smaller check. Set aside a little from earlier paychecks.

The Paycheck Budget Spreadsheet ($5.99) calculates every pay date for the year for weekly, biweekly, semi-monthly or monthly pay. Enter your bills once and it assigns each one to the right paycheck, shows what is left to spend from each check and lets you move a bill to a different paycheck in a holiday week.

For more on what lands in your account, read how to read a pay stub. Our holiday calendar lists the season's key dates, and our guide on what to do with a Christmas bonus helps you plan for extra holiday income.

Wondering which businesses stay open on December 24? Our guide to what's open on Christmas Eve covers banks, stores and the post office.