Holiday Pay & Bonus Overtime Calculator

Does federal law require holiday pay?

No. The Fair Labor Standards Act doesn't require any holiday pay — neither for the holiday itself as paid time off nor as a premium for working on a holiday. Holiday pay is purely employer policy in 49 states. Rhode Island is the one exception with a statutory requirement (Gen. Laws §25-3-3): at least 1.5× the regular rate for Sunday and holiday work, subject to statutory exemptions for several non-retail employer categories (so in practice the requirement applies most prominently to retail). Massachusetts had a similar retail rule but phased it out under Chapter 121 of the Acts of 2018 (the "Grand Bargain"). Everywhere else, what you pay for holidays is whatever your handbook, contract, or past practice says.

Source: 29 U.S.C. §207 — FLSA overtime / regular-rate framework

What's the FLSA §778.211 trap with holiday bonuses?

When an employer pays a non-discretionary bonus — one announced in advance, in the handbook, by contract, or by past practice — and the employee worked overtime that workweek, the bonus has to be included in the regular rate used to compute the OT premium. Specifically, under 29 CFR §778.209 the bonus amount is added to the workweek's straight-time pay, divided by total hours, to get a new (higher) regular rate. The 0.5× OT premium owed for hours over 40 is recomputed at the new rate. Most payroll teams pay the bonus + the standard OT premium and miss the additional premium owed because of the bonus — a small per-employee amount that becomes significant in audits across an hourly workforce.

Source: 29 CFR §778.211 — Non-discretionary bonuses · 29 CFR §778.209 — Method of computing regular rate

When is a holiday bonus "discretionary" vs "non-discretionary"?

A bonus is discretionary (and therefore excludable from the regular rate under §207(e)(3)) only when BOTH the fact of payment AND the amount are determined at the employer's sole discretion close to the end of the period. If the employer announces in January that there will be a Christmas bonus, discretion is abandoned and the bonus becomes non-discretionary — even if the specific amount is determined later. The §211(c) examples of non-discretionary bonuses include bonuses promised on hiring, bonuses from collective bargaining, attendance bonuses, production bonuses, quality bonuses, and continued-employment bonuses. The "discretionary" carve-out is much narrower than employers typically think.

Source: 29 U.S.C. §207(e)(1) and (3) — gift and discretionary-bonus exclusions

Are payments for a holiday OFF (paid time off) included in the regular rate?

No. 29 U.S.C. §207(e)(2) explicitly excludes "payments made for occasional periods when no work is performed due to vacation, holiday, illness, failure of the employer to provide sufficient work, or other similar cause" from the regular rate calculation. So if you give an employee a paid day off for Thanksgiving and they didn't work, that 8 hours of pay doesn't affect any overtime owed for the surrounding workweek. The caveat: the payment also cannot be credited toward overtime — it's separate from overtime owed for hours actually worked.

Source: 29 CFR §778.216 — Vacation/holiday/illness pay

What about premium pay for working ON a holiday (1.5× or 2×)?

Under 29 U.S.C. §207(e)(6), the premium PORTION of holiday/weekend premium pay (the part over the regular rate) is excluded from the regular rate IF the premium is at least 1.5× the regular rate and is paid because the work is on a designated holiday or weekend. So if you pay 1.5× for working on the 4th of July, the 0.5× premium portion doesn't affect the regular rate. The §207(h)(2) corollary: that same §207(e)(6) premium CAN be credited toward any overtime premium otherwise owed for the workweek. So a single rate (1.5× for working the holiday) often satisfies both the holiday-policy obligation AND the FLSA overtime requirement for those hours.

Source: 29 U.S.C. §207(e) and §207(h)

Does the calculator handle state-stacked overtime (California daily + weekly + double-time)?

No. This calculator uses the FLSA federal framework — 40-hour weekly threshold, single OT rate. California stacks daily OT (over 8h/day), double-time (over 12h/day or 7th-consecutive day after 8h), and the standard weekly OT under a "greater of daily or weekly" rule. For those state-specific stacked rules, use the state overtime calculator at /tools/state-overtime-calculator. The interaction between a non-discretionary bonus and California daily OT is doctrinally similar (the bonus increases the regular rate, which increases the premium owed for ALL premium-rate hours that week, including daily OT and double-time) — but the math is best modeled in a state-aware tool.

Does the calculator save my entries?

No. Nothing typed here is sent or saved anywhere. Closing the tab clears the data. The math runs entirely on your device.

Can I use this for tipped employees?

Not directly. Tipped employees have a tip credit that affects the regular rate calculation differently, and the §778.211 bonus-impact math interacts with the tip credit. This calculator assumes a standard hourly non-exempt employee. For tipped-employee math, you need a tip-credit-aware tool — that's a separate calculator (in the backlog).