Payment of Wages: Payroll for Eid’l Fitr

13 May, 2021, Eid’l Fitr or the Feast of Ramadhan, has now been confirmed as a Regular Holiday! How does this affect payroll for your employees in the Philippines?

In this article, we outline the payroll requirements for the Regular Holiday of Eid’l Fitr and what it means for you as an employer in the Philippines.

Feel free to contact the CloudCfo Payroll Team if your Philippine business requires Payroll Services!

Proclamation No. 1142

Proclamation No. 1142 was signed by the President of the Philippines on 10 May, 2021.

The Proclamation notes that Eid’l Fitr (the Feast of Ramadhan) was previously declared a Regular Holiday throughout the Philippines under Republic Act No. 9177. The Proclamation also notes that the National Commission on Muslim Filipinos has recommended that Thursday, 13 May, 2021 be declared a national holiday in the Philippines.

In light of the above and in order to bring the religious and cultural significance of Eid’l Fitr to the front of national consciousness, Proclamation 1142 declares Thursday, 13 May, 2021, a Regular Holiday throughout the Philippines in observance of Eid’l Fitr (the Feast of Ramadhan).

Labor Advisory No. 11, Series of 2021

Following Proclamation 1142, DOLE, released Labor Advisory, No. 11, Series of 2021 – “Payment of Wages for the Regular Holiday on May 13, 2021 in Observance of Eid’l Fitr (Feast of Ramadhan)“.

This Advisory, which was issued on 12 May, 2021, confirms the rules for the payment of wages to employees for the Regular Holiday of Eid’l Fitr.

Regular Holiday – May 13, 2021 (Eid’l Fitr or the Feast of Ramadhan) 

Below are the rules and requirements for the payment of wages to employees for Eid’l Fitr as outlined by Labor Advisory No. 11, Series of 2021.

Note: The “Cost of Living Allowance”, or COLA, is included in the computation of holiday pay for the purposes of computing wages in accordance with DOLE guidelines.

Case 1 – Employee does not work during Eid’l Fitr: They are entitled to 100% of their wage for that day, subject to any other relevant labor laws that might normally apply. i.e. [(Basic Wage + COLA) x 100%]

Case 2 – Employee works during Eid’l Fitr: They are entitled to 200% of their basic wage for the initial 8 hours of work on the day. i.e. [(Basic Wage + COLA) x 200%]. 

Case 3 – Employee works for more than 8 hours on Eid’l Fitr: They are entitled to receive an additional 30% of their normal hourly rate on that day. i.e. [Hourly rate of basic wage x 200% x 130% x number of hours worked]. 

Case 4 – Employee works on Eid’l Fitr but the day is normally a rest day for the employee: They are entitled to receive an additional 30% of their basic wage of 200% i.e. [(Basic Wage + COLA) x 200%] +[30% (Basic Wage x 200%)].

Case 5 – Employee works more than 8 hours on Eid’l Fitr and the day is usually a rest day for the employee: They are entitled to receive an additional 30% of their normal hourly rate for that day. i.e. (Hourly Rate of Basic Wage x 200% x 130% x 130% x number of hours worked). 

Exempted Establishments for Eid’l Fitr

As with previous recent advisories, Labor Advisory No. 11, Series of 2021, provides that establishments that have completely closed or ceased operations during the community quarantine period in the country arising from COVID-19 are exempted from the obligation to pay employees for the Regular Holiday Eid’l Fitr. 

Payroll in the Philippines – Expert Insights

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