How to Calculate Holiday Pay for Hourly and Salaried Employees

Holiday pay depends entirely on your employer’s policy, because federal law does not require private employers to pay for holidays. The two common forms are pay for a holiday you take off, usually your normal daily hours at your base rate, and a premium for working on a holiday, often 1.5 or 2 times your rate. For an employee earning $20 an hour, an 8-hour paid holiday is worth $160, and 8 hours worked on a holiday at time and a half is worth $240. If the policy pays both, the total for working the holiday is $400.

Common holiday pay policies

Some employers give a floating holiday or a substitute day off instead of premium pay. Union contracts often specify exactly which of these applies.

The formulas

Holiday not worked (paid day off):

Holiday worked with a premium:

The holiday pay calculator applies any combination of multiplier and holiday hours.

Worked example 1: a week with a paid holiday

Alex earns $20 an hour. Monday is a paid holiday (8 hours), and he works Tuesday through Friday, 9 hours a day (36 hours).

• Holiday pay: 8 × $20 = $160
• Hours worked: 36 × $20 = $720
• Total: $880 for 44 paid hours

Under the Fair Labor Standards Act, overtime depends only on hours actually worked. Alex worked 36 hours, so no federal overtime is owed, even though he was paid for 44. If his employer’s policy counts holiday hours toward overtime, he would receive 4 overtime hours instead; that is a policy choice, not a legal requirement.

Worked example 2: working the holiday

Maria earns $24 an hour. Her employer pays holiday pay plus time and a half for hours worked on a holiday. She works 10 hours on Thanksgiving.

• Holiday pay: 8 × $24 = $192
• Hours worked at 1.5×: 10 × $36 = $360
• Total for the day: $552

Worked example 3: holiday premium and weekly overtime

Holiday premiums can overlap with weekly overtime. Suppose Jordan earns $20 an hour and works 48 hours in a week, including 8 hours on a holiday, under a policy that pays time and a half for holiday hours worked.

The FLSA lets employers credit a holiday premium of at least 1.5 times the base rate toward overtime owed for the same week (29 CFR 778.203 and 778.219). Two approaches:

Both comply with federal law; which one applies depends on the employer’s written policy. Because the holiday premium is excluded from the regular rate when it is at least 1.5 times the base, it does not raise the overtime rate. See how to calculate time and a half for the regular-rate rules.

Part-time and variable schedules

For part-time employees, policies often pay holiday hours equal to their average daily hours. Someone who works 24 hours a week across 4 days averages 6 hours a day, so a paid holiday would be 6 × their rate. Others pay holiday pay only if the holiday falls on a regularly scheduled workday, or only after a waiting period.

Common eligibility conditions include working the scheduled shifts immediately before and after the holiday, completing an introductory period and not being on unpaid leave.

Salaried employees

Salaried exempt employees typically receive their normal salary for a holiday week regardless of the closure. Under the FLSA salary basis rule, the employer cannot dock their salary because the business was closed. If an exempt employee works on a holiday, extra pay or a substitute day off is a policy decision.

Salaried non-exempt employees are paid like hourly workers for overtime purposes: the salary covers the agreed schedule, and premium pay applies only as the policy or overtime law requires.

2026 federal holidays

Private employers often follow the federal holiday calendar, though few give all 11 days off. Under 5 U.S.C. 6103, a holiday that falls on a Saturday is observed the Friday before, and one on a Sunday is observed the Monday after.

The business days calculator can exclude these dates when counting workdays, and how to calculate business days explains the rules.

Overnight shifts on holidays

When a shift runs from 10 PM on December 24 to 6 AM on December 25, check whether the policy pays the premium for hours that fall on the calendar holiday (here, 6 hours) or for the shift that starts or ends on it. The guide on calculating hours worked overnight shows how to split those hours.

Checklist

1. Read the written holiday policy: which days, eligibility rules and the premium multiplier.
2. Separate holiday hours not worked from hours worked on the holiday.
3. Apply the multiplier to hours worked and add holiday pay if the policy pays both.
4. Total hours actually worked for the week to check for overtime; the overtime calculator applies the 40-hour test.
5. Confirm on your pay stub, which should list holiday pay as its own line. The payroll calculator estimates the taxes on that gross pay.

This guide describes common holiday pay practices and federal rules for general information. It is not legal advice; employer policies, union contracts and state or public-sector rules vary.