Public holidays and pay: the questions your policy must answer
Seven questions that settle who gets a public holiday off, what working one pays and how holidays mix with leave, with worked examples.
7 min readFor owners, payroll and managers
In short
- Public holiday rules differ widely between countries and regions, so start by checking what applies to each person.
- A clear policy answers seven questions, from which calendar someone follows to what happens when a holiday lands in booked leave.
- Working a holiday is usually rewarded with a higher rate, a day off later, or both. Pick one and write it down.
- Part-time and shift staff are where most disputes start. Decide their treatment before the holiday, not after.
On this page7 sections
Public holidays look simple on a calendar and turn complicated in a pay run. One person had the day off, one worked it, one never works that weekday, and one was already on annual leave. Each of them will look at their payslip and expect it to make sense.
There is no single worldwide answer. In some places a public holiday is a paid day off by law; in others it is up to the contract; rates for working one range from nothing extra to a large premium. Nothing here is legal or payroll advice. Check the rules that apply to you, then use the seven questions below to turn them into a policy people can follow.
The seven questions
1. Which calendar does each person follow?
Holidays differ by country and often by region inside a country. If your team is spread out, each person should follow the calendar for where they work, not where head office is. Add any company closure days you treat the same way.
2. Is the day off paid, and for whom?
Decide who gets a paid day off when they would normally have worked: everyone, or only some kinds of worker. Local rules may answer this for you, and may treat employees, casual workers and contractors differently.
3. What does working the holiday pay?
The usual options are a higher hourly rate, normal pay plus a day off later (often called a day in lieu), or both. Whichever you choose, state the rate as a multiplier and say how long someone has to take a day in lieu.
4. What if it falls on a day the person does not work?
A holiday on a Saturday means nothing to a Monday-to-Friday worker unless your rules or policy give a substitute day. The same question arises for a part-timer whose day off happens to be the holiday.
5. How are part-time staff treated?
Many holidays fall on the same weekday each year, so part-timers can do well or badly purely by which days they work. Some businesses give the holiday only when it falls on a working day; others give every part-timer a pro-rata share of the year's holidays.
6. What if the holiday falls inside booked leave?
In most policies a public holiday inside a week of annual leave does not use up a leave day. Check that your leave counting does this, or people will lose a day without noticing.
7. Does a paid holiday count towards overtime?
If someone has a paid holiday on Monday and works 36 hours from Tuesday to Friday, have they passed a 40-hour weekly limit? Whether paid but unworked hours count is set by local rules or your own policy. Decide it once.
Three ways to pay for a worked holiday
- Normal pay for the day: 8 × 18 = 144.
- Option A, time and a half: 8 × 18 × 1.5 = 216.
- Option B, double time: 8 × 18 × 2 = 288.
- Option C, normal pay plus a day in lieu: 144 now, and a paid day off later worth another 144.
- Options B and C cost the business the same; the difference is whether the person gets money or rest.
| Approach | Good for | Watch out for |
|---|---|---|
| Higher rate | Simple to run; staff see the reward on the next payslip | Wage cost jumps in holiday-heavy periods |
| Day in lieu | Keeps wage cost level; gives people rest | Days in lieu must be tracked and actually taken |
| Rate plus day in lieu | Hard-to-fill holiday shifts | The most expensive option; check it is needed |
- Approach
- Higher rate
- Good for
- Simple to run; staff see the reward on the next payslip
- Watch out for
- Wage cost jumps in holiday-heavy periods
- Approach
- Day in lieu
- Good for
- Keeps wage cost level; gives people rest
- Watch out for
- Days in lieu must be tracked and actually taken
- Approach
- Rate plus day in lieu
- Good for
- Hard-to-fill holiday shifts
- Watch out for
- The most expensive option; check it is needed
Holidays, leave and part-time staff
- Emma Wilson works Monday to Friday and books a full week off.
- Thursday of that week is a public holiday on her calendar.
- Leave used: 4 days, not 5. The holiday is paid as a holiday.
- The calendar has 10 public holidays this year. Full-time is 5 days a week.
- Ben Carter works 3 days a week: 10 × 3 ÷ 5 = 6 days.
- If only 4 holidays fall on his working days, he is given 2 extra paid days to take at another time.
- If 7 fall on his working days, the policy needs to say what happens to the extra one. Decide that before the year starts.
The pro-rata approach is not required everywhere and is not the only fair one. It is shown here because it is the one that needs a sum.
Put it in writing
- List where your people work and find the public holiday calendar for each place.
- Check the rules that apply in each place: paid days off, rates for working, substitute days.
- Answer the seven questions in a sentence each. Where the law leaves a choice, make one.
- Add one worked example for a worked holiday and one for a holiday during leave.
- Share the policy and the year's holiday dates before the leave year starts, so shift planning and time off requests can take them into account.
- Review it each year when the new calendar is published; dates move and substitute days change.
Mistakes to avoid
- Using one country's calendar for everyone in a team spread across regions.
- Taking a day of annual leave for a public holiday that fell inside a booked week.
- Promising days in lieu and keeping no record of them.
- Paying a premium rate for the whole shift when only part of it was on the holiday (or the other way round) without a rule for shifts that cross midnight.
- Treating part-timers case by case, so two people with the same hours get different answers.
How ClockinBee handles public holidays
ClockinBee has public holiday calendars for 47 countries and regions. Add the ones you need, edit them (for example to add a company closure day), and set a calendar as the default for a location or give one to an individual person. Each person follows one calendar.
Holidays on a person's calendar are not counted as leave. Together with each person's working-day pattern, that means the request preview shows the true number of days a request uses and the balance left: Emma's week above shows 4 days. The who's-off calendar helps managers see cover around a holiday before approving more requests.
For hours worked on a holiday, each overtime rule has a public holiday multiplier that you set, and those hours appear separately in the payroll export, a file you download in the import layout of your payroll, accounting or HR system. Payslips are labelled as estimates before tax. ClockinBee applies the calendar and the multiplier you choose; it does not decide what the law requires where you are, and you should confirm that the settings match your policy.
Questions people ask
Do we have to give public holidays off with pay?
It depends on the country, sometimes the region, and the type of worker. In some places it is a legal right and in others it comes from the contract. Check the rules that apply to you.
What if a holiday falls on a weekend?
Some places move it to a weekday as a substitute day and some do not. Check the official calendar for the year, and make sure your own calendar shows the day people actually get.
Someone is off sick on a public holiday. Which is it?
Local rules and your policy decide whether the day counts as sickness or as the holiday. Pick one answer and apply it to everyone.
Can staff swap a public holiday for a different day?
Many businesses allow it by agreement, for example for a religious or cultural day that matters more to the person. If you allow swaps, record them so the pay and the leave balance stay right.
How to do this in ClockinBee
- Public holiday calendarsGive each location or person the right public holidays, and add your own days.
- Set up overtime rulesDaily and weekly limits, and rates for overtime, Sundays and public holidays.
- Give people different rulesHow ClockinBee decides which overtime rule, time off policy and holiday calendar applies to each person.
- Export hours and time off to payrollDownload approved hours, overtime and time off in the layout your payroll system imports.
Try it with your own team
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This guide is general information, not legal, tax or payroll advice. Working time, pay and time off rules differ by country and contract, so check the rules that apply to you.