Holiday pay is compensation that employers provide to employees for time worked or time off during public or statutory holidays. Holiday pay policies vary: In some countries, you must pay workers extra (such as double-time); in others, holidays are unpaid leave.
As an employer, understanding the laws and cultural expectations around holidays and holiday pay is essential-especially for distributed workforces. Your global workforce is going to expect that, at a minimum, you'll be providing pay for their country-specific and even regional holidays.
Note: Holiday pay is distinct from holiday bonuses, which are payments given to workers around an important holiday. In Mexico, for example, the federal government requires employers to give a Christmas bonus called aguinaldo.
Holiday pay in the U.S.
In the U.S., no federal law requires employers to provide paid time off for holidays, so holiday pay is typically an employer policy or negotiated benefit. Still, many organizations choose to offer it as part of a competitive benefits package. Common paid holidays in the U.S. are New Year's Day, Independence Day, Thanksgiving, and Christmas, among others holidays.
If your team works on a holiday, federal law doesn't mandate extra pay, unless their hours exceed overtime thresholds under the Fair Labor Standards Act (FLSA). That means time-and-a-half or double-time pay for working holidays isn't automatically required-unless it's company policy or part of a collective agreement with your employees' union.
Holiday pay globally
In most countries outside the U.S., holiday pay is legally regulated and usually mandatory, but each country has a slightly different approach. Some countries guarantee paid time off, while others require premium pay for holiday shifts. Within the borders of a single country, holidays can differ across federal, state, and local jurisdictions.
Here's a snapshot of holiday pay around the world:
- Australia. Employees in Australia are entitled to paid leave on public holidays if those days fall during their usual working schedule. Typically, employees who are required to work on a public holiday receive penalty rates (i.e., extra pay, such as time-and-a-half or double-time), depending on their award, enterprise agreement, or employment contract.
- Brazil. In Brazil, employees must receive paid leave on public holidays, as guaranteed by law. If employees have to work, they must be paid at least double the normal wage for the hours worked, with occasionally even higher rates applying depending on collective agreements.
- Germany. A guaranteed employee right in Germany, public holidays are paid days off. You are legally required to give employees their regular pay even when they're not working on the holiday itself. If employees are required to work, German law often entitles them to extra compensation, such as overtime pay or an additional paid day off at a later date (known as time off in lieu).
- India. India observes three national holidays-Republic Day, Independence Day, and Gandhi Jayanti-which are mandatory paid days off for all employees. Beyond these, each state designates its own public holidays based on local festivals and observances. So, you'll want to provide additional paid leave specific to your employee's location.
- United Kingdom. In the U.K., employees are generally entitled to paid leave on public holidays, known as bank holidays, which are often included as part of their annual statutory leave entitlement (5.6 weeks for most employees). While you aren't legally required to grant every public holiday as paid time off in the U.K., most employers do, either by contract, company policy, or custom.
Want to learn more about holidays in other countries? Check out Pebl's country explorer.
For organizations with teams around the world, figuring out holiday pay can quickly become complex. No one-size-fits-all policy will cover every country, so it's crucial to audit and adapt holiday pay practices for each region where you operate.
Best practices for employers
Write clear holiday pay policies
When policies spell out who qualifies for holiday pay, which holidays are covered, how pay is calculated, and any conditions for eligibility, there's less room for confusion, disputes, or unintentional noncompliance. Placing these details in writing demonstrates your organization's commitment to transparency and fairness regarding holidays.
When U.S. courts look at contract disputes, they often interpret unclear language in favor of the employee rather than the employer who wrote it. This principle applies to holiday pay policies, too. Since every country handles holiday pay differently, you need crystal-clear policies tailored to each location. That template you're thinking of copying across multiple countries? It won't cut it. Strive for equity for remote employees and global teams
When employees in different regions see that holiday benefits are applied fairly (according to local requirements and with the same spirit of recognition), there's far less risk of dissatisfaction, resentment, or perceived inequity.
Let's take holiday pay out of the equation for a moment: Many countries celebrate an independence day or national day. It would not be a great look if your company makes a hoopla about the U.S. Fourth of July (Fireworks GIFs on Slack! A BBQ at headquarters!), but fails to acknowledge Bastille Day, even though numerous employees reside in France. Consistent application of holiday policies helps you build a reputation as an employer who values every team member equally, no matter where they work.
Do you have U.S. workers? Consider offering holiday pay
Even when not legally required, providing holiday pay can improve retention and employer brand. The 2025 Holiday Practices Report, based on a survey of over 900 U.S. employers by the employer advocacy organization MRA, summarized the profound impact of holiday pay on employees: "Paid time off is not just a matter of convenience; it's a resource that can significantly impact employee engagement, satisfaction, and overall company success."
Even though holiday pay is optional in the U.S., it's wise for you to check out what holiday pay offerings your competitors are extending to their talent. Another U.S. employer organization, ASE, noted in their 2025 Holiday Schedule & Practices Survey that "Benchmarking holiday offerings is essential for employers who want to stay competitive in today's talent-driven market."
Stay compliant
The bottom line regarding holiday pay is: Comply with all applicable labor laws to protect your business from fines and legal headaches. In some countries, like the U.S., this is a relatively straightforward proposal. In others, like India, it can become dizzyingly complex.
Get holiday pay right in every country
Pebl makes holiday pay simple-even when global rules get complex.
With Pebl, you can instantly access up-to-date holiday pay requirements for 185+ countries, helping ensure compliance and fair pay everywhere teams work.
No more guesswork, endless research, or risk of missteps.
Pebl can help ensure your pay practices are consistent, so you can focus on rewarding employees and building trust across borders. Let's chat about how we can make the holidays more joyful for you and your employees, wherever they call home.
Disclaimer: This information does not, and is not intended to, constitute legal or tax advice and is for general informational purposes only. The intent of this document is solely to provide general and preliminary information for private use. Do not rely on it as an alternative to legal, financial, taxation, or accountancy advice from an appropriately qualified professional. The content in this guide is provided "as is," and no representations are made that the content is error-free.
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