How to Calculate Employee Overtime Pay on Holidays: The Complete Guide for Employers

Hello everyone, I am your dedicated public holiday assistant. Recently, a little friend asked me about how to figure employee earning overtime on a holiday. Now I will summarize the relevant problems, hoping to help the folks who want to get this right. There’s a lot of confusion out there — some bosses think every hour worked on a holiday is automatically overtime, while others try to skimp on pay. Let’s break it down in plain English so you know exactly what’s what.

First off, let’s get the basics straight. When we talk about overtime on a holiday, we’re really talking about two separate things: the federal overtime rules under the Fair Labor Standards Act (FLSA), and whatever extra “holiday pay” your company might offer. Under the FLSA, overtime is based on hours worked in a workweek, not on whether it’s a holiday. So if you work on Christmas Day but only put in 35 hours total that week, you don’t get overtime — unless your state has a daily overtime law (like California, where you get overtime after 8 hours in a day). The key is that the holiday itself doesn’t trigger overtime; only the total hours worked over 40 in a week (or over 8 in a day in some states) counts.

Now, here’s where it gets tricky. A lot of employers offer “holiday pay” as a bonus — say, time-and-a-half or even double time for working on a holiday. That’s not required by federal law, but many companies do it to attract workers or because they have a union contract. That extra pay is separate from overtime. For example, if you work 42 hours in a week and 8 of those hours fall on a holiday, your employer might pay you straight time for the first 40 hours, then 2 hours of overtime at 1.5x your regular rate, plus maybe an extra dollar or two per hour for the holiday shift. The holiday premium doesn’t cancel out the overtime — you’re owed both if you exceed 40 hours.

Let’s walk through a real-world example. Say you’re an hourly employee making $20 per hour, and you work 44 hours in a week that includes Thanksgiving (8 hours on holiday). Your employer offers time-and-a-half holiday pay for working Thanksgiving. Here’s how you figure the earnings:

First, calculate regular pay for all 44 hours at $20/hr — that’s $880. But wait, the last 4 hours are overtime (since 44 total minus 40 = 4 overtime hours). Under FLSA, overtime premium is half of the regular rate for those 4 hours (so an extra $10/hr), adding $40. Then the holiday pay: the employer’s policy gives an extra 0.5x for working the holiday (so an additional $10/hr for 8 hours = $80). Total: $880 + $40 + $80 = $1,000. Make sense? The holiday bonus is on top of the overtime, not instead of.

But what if you’re salaried nonexempt? Same concept — your regular rate is your weekly salary divided by the number of hours it covers (usually 40). Then any hours over 40 get 1.5x that rate, and any holiday premium is extra. Another common snag: some companies try to “pyramid” overtime and holiday pay, meaning they only pay the highest rate. That’s generally illegal under FLSA — you must pay both if both conditions are met. Check your state laws, too, because places like Alaska, California, and Nevada have daily overtime that applies even if you’re under 40 hours for the week. For instance, working 10 hours on July 4th might mean 2 hours of daily overtime plus holiday pay.

One more thing: what if the holiday is a paid day off? That’s different. If you get holiday pay for not working (like a paid holiday), those hours usually don’t count toward overtime. The FLSA only counts hours actually worked for the 40-hour threshold. So if you’re paid 8 hours for a holiday you didn’t work, and then you work 38 hours the rest of the week, you’ve only worked 38 hours — no overtime. The paid holiday is just extra compensation, not “time worked.”

Questions related to how to figure employee earning overtime on a holiday

Q: Does federal law require double pay for working on holidays?
No. The Fair Labor Standards Act does not require any extra pay for working on holidays — not time-and-a-half, not double time. That’s entirely up to your employer or your union contract. However, if working on the holiday pushes your total hours above 40 for the week (or over daily limits in some states), then overtime rules kick in. Many employers offer “premium pay” for holidays because they want to staff those days, but it’s not a legal requirement.

Q: If my company offers 1.5x holiday pay, does that replace overtime?
Depends on how the policy is written. If the holiday pay is simply a bonus or a different rate, you still get overtime for any hours over 40. For example, if you work 42 hours and the last 2 are on a holiday, you’re owed 2 hours of overtime (at 1.5x) plus the holiday premium (maybe an extra 0.5x). The two don’t cancel out unless the policy explicitly says the holiday rate is “in lieu of” overtime, which is rare and usually illegal under FLSA. Best practice: calculate overtime first on all hours worked, then add the holiday premium separately.

Q: How do I calculate the regular rate for overtime when holiday pay is involved?
The regular rate is your total straight-time earnings (including hourly wages, commissions, piecework, etc.) divided by total hours worked that week. But — and this is important — holiday pay that’s a gift or bonus unrelated to hours worked generally doesn’t count in the regular rate. If the holiday pay is tied to working that day (like a premium per hour), it becomes part of the regular rate calculation, which can sometimes reduce the overtime rate slightly. For most people, the simplest way is to treat the holiday premium as a separate line item after computing overtime on the base pay. If it’s complicated, consult a payroll professional or an attorney.

Q: What about state laws? Do they change the calculation?
Yes, big time. States like California require overtime pay for any hours worked over 8 in a day (excluding certain exceptions), and double time for over 12. So if you work a 10-hour holiday shift in California, you get 2 hours of daily overtime at 1.5x, plus any holiday premium your employer offers. Other states like Colorado have overtime after 12 hours in a day. Always check your state labor department’s website. Also, some states have specific rules about “call-back pay” or “reporting pay” that can interact with holiday overtime. Don’t assume federal law covers everything — state laws often give more protections.

Q: Can an employer avoid paying overtime on a holiday by using a different workweek?
No, that’s illegal. The FLSA defines a fixed, regularly recurring 7-day workweek — an employer can’t shift the workweek to dodge overtime. For example, if a holiday falls on Monday and the workweek runs Sunday to Saturday, the employer can’t arbitrarily change the workweek to Tuesday to Monday just to avoid overtime. The workweek must be set and consistent. However, employers can choose their workweek start day (e.g., Wednesday to Tuesday) as long as it’s permanent and used for all employees. If you suspect manipulation, contact the Wage and Hour Division.

I hope this article helps you fully understand how to figure employee earning overtime on a holiday. The bottom line: holidays don’t automatically mean overtime — only hours worked over 40 in a week (or over daily limits in some states) trigger overtime. Any extra holiday pay from your employer is gravy on top, but it doesn’t replace overtime obligations. If you have more questions, please contact us at public holiday calendar.COM. Thanks for reading!