Holiday pay calculator

The same week worked out two ways

Both totals use the inputs above. The only thing that changes between them is which hours enter the 40 hour test.

Counting the 8 unworked holiday hours toward the 40 hour test invents 4 overtime hours and $62.22 of premium that federal law does not require.

Why paid holiday hours stay out of the overtime test

Overtime under the Fair Labor Standards Act is measured on hours worked, not on hours paid. A holiday week normally contains both, and they are not interchangeable. The regulation on pay for idle hours states it directly.

“Payments which are made for occasional periods when the employee is not at work due to vacation, holiday, illness, failure of the employer to provide sufficient work, or other similar cause, where the payments are in amounts approximately equivalent to the employee's normal earnings for a similar period of time, are not made as compensation for his hours of employment. Therefore, such payments may be excluded from the regular rate of pay under section 7(e)(2) of the Act and, for the same reason, no part of such payments may be credited toward overtime compensation due under the Act.”
29 CFR 778.218, pay for certain idle hours

Read the last clause again. No part of that payment may be credited toward overtime compensation. The hours behind it do not carry the week toward the threshold either, because the regulation says they are not compensation for hours of employment at all.

The default case above is that argument in arithmetic. The week carries 44 paid hours. 36 of them were worked and 8 were not. The overtime test looks only at the 36, which sits under 40, so no federal overtime is owed and the correct gross is $1,344.00. A calculator that adds the unworked hours into the same test sees 44 hours, finds 4 overtime hours that do not exist, and reports $1,406.22. The gap is $62.22 in a single week.

The regulation is also narrower than most readers assume about what a holiday even is.

“The term holiday is read in its ordinary usage to refer to those days customarily observed in the community in celebration of some historical or religious occasion; it does not refer to days of rest given to employees in lieu of or as an addition to compensation for working on other days.”
29 CFR 778.218(b)

A floating day, a compressed schedule day off, and a day granted for covering a weekend are therefore not holidays here, and the label on the timesheet does not decide it. Nor does the same exclusion pick them up instead, which is the assumption that costs a reader money. The regulation limits itself in the next breath.

The provision of section 7(e)(2) of the Act deals with the type of absences which are infrequent or sporadic or unpredictable. It has no relation to regular “absences” such as regularly scheduled days of rest.
29 CFR 778.218(b)

So only a non routine, infrequent or unpredictable paid absence stays outside the regular rate. Pay for a regularly scheduled day of rest belongs inside total remuneration, which raises the regular rate and therefore raises the overtime owed. Put those hours in the worked column, not the unworked one, or the figure below understates what you are owed.

Federal law requires no holiday premium

There is no federal holiday rate. The federal overtime scheme runs on hours, past 40 in a workweek, and not on which day those hours fall. That is visible in the regulations themselves. 29 CFR 778.203 describes what happens when a premium for work on a holiday is paid, and how it is then treated, rather than requiring one to exist. If your check pays time and a half on a holiday, that comes from a company policy, an offer letter, or a collective bargaining agreement. Some states and many union contracts do set holiday rules of their own, and where they do, that statute or that contract is the document that governs.

That is why the multiplier on this page is an input rather than a rate to look up. The table runs the same 8 holiday hours worked and the same 28 other hours at the three multipliers employers actually use.

Double time is the version people search for by name. At $28.00 an hour it pays $56.00 for every holiday hour worked, so the 8 hour shift is worth $448.00. Watch the fourth column as you read across. A richer multiplier lifts the regular rate for the whole week, because a flat holiday premium is part of total pay for hours worked, so in a week that does run past 40 worked hours the overtime premium rises too.

How the regular rate is built

The regular rate is not your base hourly rate. It is an average, and the regulation defines it as one division.

“The regular hourly rate of pay of an employee is determined by dividing his total remuneration for employment (except statutory exclusions) in any workweek by the total number of hours actually worked by him in that workweek for which such compensation was paid.”
29 CFR 778.109, the regular rate is an hourly rate

Hours actually worked go underneath, which in the default case is 36. What goes on top depends on one threshold, and that threshold is the thing most holiday calculators never apply.

“Under section 7(e)(6) and 7(h) of the Act, extra compensation provided by a Premium rate of at least time and one-half which is paid for work on Saturdays, Sundays, holidays, or regular days of rest or on the sixth or seventh day of the workweek (hereinafter referred to as “special days”) may be treated as an overtime premium for the purposes of the Act. If the premium rate is less than time and one-half, the extra compensation provided by such rate must be included in determining the employee's regular rate of pay and cannot be credited toward statutory overtime due, unless it qualifies as an overtime premium under section 7(e)(5).”
29 CFR 778.203, premium pay for work on special days

So the holiday premium splits in two. The straight time for those hours is ordinary pay and always counts. The extra on top, $112.00 in the default case, is treated one of two ways. At a multiplier of 1.5 or better it is an overtime premium, so it stays out of the regular rate, and section 7(h) lets the employer credit it against the statutory overtime owed. Below that multiplier it goes into the rate and no part of it may be credited. The companion section puts the credit plainly.

“Certain premium payments made by employers for work in excess of or outside of specified daily or weekly standard work periods or on certain special days are regarded as overtime premiums. In such case, the extra compensation provided by the premium rates need not be included in the employee's regular rate of pay for the purpose of computing overtime compensation due under section 7(a) of the Act. Moreover, under section 7(h) this extra compensation may be credited toward the overtime payments required by the Act.”
29 CFR 778.201, overtime premiums generally

The default multiplier here is 1.5, which is 1.5 or better, so the extra is excluded and the regular rate stays at $28.00 rather than being pulled up to $31.11. That matters most in a long week. Run the same rate at 12 holiday hours and 48 other hours and the difference between the two treatments is real money, because folding the premium into the rate inflates every overtime hour that follows and then forgets to credit the premium already paid. Overtime, where any is owed, is half the regular rate for each overtime hour, less whatever excludable premium has already been handed over.

One caution. A premium that is not really tied to working a special day, and a flat sum paid whether or not the day is worked, do not qualify under this section, and a reader on a collective bargaining agreement should check how the contract describes the premium before relying on the treatment here.

Taking cash instead of the day off is covered separately, and it lands in the same place.

“When an employee who is entitled to such paid leave forgoes the use of leave and instead receives a payment that is the approximate equivalent to the employees' normal earnings for a similar period of working time, and is in addition to the employee's normal compensation for hours worked, the sum allocable to the forgone leave may be excluded from the regular rate.”
“Since it is not compensation for work, pay for unused leave may not be credited toward overtime compensation due under the Act.”
29 CFR 778.219, pay for forgoing holidays and unused leave

So money paid in place of a holiday you never took is not hours worked, and it cannot shorten the distance to 40 hours or satisfy an overtime obligation. Enter it in the paid and not worked field, where the calculator adds it to the gross and keeps it out of the test.

Sources for the arithmetic on this page. 29 CFR 778.109, 29 CFR 778.218, and 29 CFR 778.219.

Common questions

What this leaves out

Every figure on this page is gross pay for a single workweek, before anything is withheld. Nothing here models federal income tax, Social Security, Medicare or state tax. State rules are not modelled either. Several states require overtime past a daily hour count as well as a weekly one, and a few impose holiday rules of their own, so a state test can produce a larger number than the federal one. The calculator assumes one employer, one workweek, and a non exempt employee.

The result is an estimate, not tax advice and not legal advice. Pre-tax deductions, local taxes and credits are excluded, and so is all tax withholding, because this page answers a gross pay question. Check your own pay stub, your employer's holiday policy and any collective bargaining agreement that covers you before acting on a figure here.

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