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Key takeaways
- Holiday pay is extra compensation you might receive for working on holidays, though it’s not legally required by federal law.
- Companies choose whether to offer holiday pay and can set rates at regular pay, time and a half, or double time.
- Time and a half means 50% more than your regular rate – for example, a wage of $15/hour would become $22.50/hour.
- Check your employee handbook or ask human resources about your company’s specific holiday pay policy.
If you’re wondering how holiday pay works during busy seasons, you’re in the right place.
Understanding this type of compensation puts you in control of your earnings and helps you plan your finances better. We’ll break down everything from what it means to how much extra money you could earn, plus give you the tools to calculate your potential earnings.
What is holiday pay?
Holiday pay is additional compensation you receive for working on designated holidays like Christmas, Thanksgiving, or New Year’s Day. Some employers also pay you for these occasions even when you don’t work. Employers can offer this benefit for federal and state government-designated holidays, including:
- New Year’s Day
- Birthday of Martin Luther King, Jr.
- Washington’s Birthday (also known as Presidents’ Day)
- Memorial Day
- Juneteenth National Independence Day
- Independence Day
- Labor Day
- Indigenous Peoples’ Day/Columbus Day
- Veterans Day
- Thanksgiving Day
- Christmas Day
Companies can also choose other days to include in this benefit, such as Good Friday, Easter, the day after Thanksgiving, Christmas Eve, or New Year’s Eve.
Who's eligible to receive holiday pay?
Your eligibility for holiday pay typically depends on your employer’s specific policy.
But if your company is closed on a holiday or you opt to take time off, it’s up to your employer to decide if those days should be paid or not. That’s because the Fair Labor Standards Act (FLSA) doesn’t require payment for time not worked – including holidays and vacations.
How do you calculate holiday pay?
Knowing how much money to expect can help you plan ahead with your finances. Here’s a simple rule: If your employer pays you for holidays worked, the pay rate you earn has to at least be the same as your normal pay rate.
So, if you’re paid $15 per hour for a regular shift and your company’s policy includes holiday pay, your rate for working that day will be at least your normal pay rate.
That being said, some employers may offer higher rates at their discretion:
- Time and a half: This means you’d earn 50% more than your usual wage. For example, $15/hour would become $22.50/hour.
- Double time: With double time, you’d earn twice as much as usual. In this case, that $15/hour would become $30/hour.
- Regular pay plus bonus: Here you’d make your usual rate plus a bonus. For example, you might get $15/hour plus a flat holiday bonus of $60.
What is time and a half?
Earning time and a half means that you’ll receive 50% more than your regular pay rate.
If we go back to the previous $15 per hour example, your time-and-a-half pay rate would come out to $22.50 per hour. Remember, this is what you’ll earn before taxes are taken out.
If you work overtime, you might have earned time and half pay before or be familiar with the concept. Any hours you work during the week over 40 are considered to be overtime and eligible for time-and-a-half pay.
Some states also use a daily rule for overtime pay. In certain states, once you hit eight hours of work, any hours beyond that for the day are considered overtime and are eligible for time-and-a-half pay.
What is double time?
Employers who want to offer premium pay rates for holidays worked can increase the amount to double time. Earning double time for holiday pay means you’re getting twice your regular hourly rate. For example, a $15 hourly rate would turn into $30 an hour. As you can see, you could earn a lot more if your employer offers double time rather than time and a half.
What holidays are paid time and a half?
There are no employment laws that specify which holidays have to be paid time and half: The decision to do so is up to the employer.
Any of the federally-recognized holidays mentioned earlier could be eligible for time-and-a-half or double-time pay if that’s included in your employer’s holiday pay policy. Time-and-a-half pay could also be offered for any other days your employer designates as a holiday.
The only scenario where time and a half is required is if you work overtime during a holiday week. And then, your time-and-a-half rate would still be based on your regular hourly wage and the number of hours you worked over 40.
You can earn holiday pay and overtime pay in the same week. But overtime calculations are only based on the number of hours you actually worked. If you receive holiday pay for eight hours that you didn’t work, those hours wouldn’t count toward your total for overtime pay.
How do I know if I get holiday pay?
If your employer offers holiday pay, the details of their pay policy should be spelled out in your employee handbook. You can also check your pay stub to see how holiday pay appears on your paycheck. If you don’t have a copy of your employee handbook available, you can reach out to your HR or payroll department for more answers.
When discussing holiday pay benefits, either as a current employee or a new hire, be sure to ask the following questions:
- Does the company have a holiday pay package?
- Which holidays are included in the company’s policy?
- Does the policy designate paid holidays, regardless of whether you work?
- How much will I be paid for working on a holiday – will it be my regular rate, time and a half, or double time?
- Is working a holiday voluntary or mandatory?
Remember, there is no federal law that requires your company to give you a holiday off. The exception is if you need to take a holiday off for religious observance. In that case, the U.S. Department of Labor requires employers to make reasonable accommodations so you can do so.
Turn your holiday pay into financial progress
If your employer offers holiday benefits, whether you’re working the holiday or not, it pays to take advantage of them. Having extra money come your way could help you cover last-minute shopping or pay off any credit card debt you might have accumulated buying presents.
Another good way to make use of your employer’s financial gift? Use your holiday pay to open a savings account. That way, you could jumpstart your emergency fund or start planning for a long-term financial goal without taking away from your regular paychecks.
It’s easy to think of holiday pay as free money—especially if you’re getting paid for a holiday without working. But even if you only receive it a few times a year, it’s still important to stretch those extra dollars as far as possible.
Our guide on how to make a budget can help you manage your holiday pay and regular income wisely.
Frequently asked questions about holiday pay
What is an example of holiday pay?
If you earn $20 per hour and get time and a half for working a holiday, you’ll earn $30 per hour instead of your usual $20. Before taxes, an eight-hour shift would pay $240 instead of the usual $160.
What is holiday pay for $15 an hour?
At time and a half, your holiday pay would be $22.50 per hour. At double time, you’d make $30 per hour.
Are holiday pay and overtime the same?
No, holiday pay and overtime are different. Federal law requires overtime pay for hours worked over 40 per week, while holiday pay is an optional benefit an employer may choose to offer.