Holiday Pay Tax Calculator
Calculate federal withholding on holiday pay - taxed as regular wages
Holiday Pay Tax Treatment
Federal Tax Rate
Same
Holiday pay = regular wages
No special tax treatment
Withholding Method
Regular
Same withholding as
normal paycheck
Good News:
Holiday pay is NOT taxed at a higher rate! It's treated exactly like your regular wages. If you work on Christmas and get "holiday premium" (double time), that extra is still just regular income.
What is Holiday Pay?
Type 1: Paid Holiday (Day Off)
Employer pays you even though you don't work. Common for salaried and full-time hourly employees.
Example:
• Normally work 40 hours/week at $25/hour = $1,000
• Week with 1 paid holiday: Work 32 hours, paid for 40 = still $1,000
• Tax: Same as normal week
Type 2: Holiday Premium (Working Holiday)
Employer pays extra ("time-and-a-half" or "double time") if you work on holiday. This is company policy, not federal law.
Example:
• Regular rate: $25/hour
• Work 8 hours on Christmas (double time policy)
• Holiday pay: 8 hours × $50 = $400
• Tax: Taxed as regular income (no "special" rate)
Important:
Federal law does NOT require employers to pay extra for holidays. "Holiday premium" is voluntary benefit. If you're non-exempt and work over 40 hours in the week due to holiday work, you must get overtime (1.5×), but that's separate from holiday premium.
Holiday Pay Examples
Example 1: Paid Holiday (Not Working)
Salaried HOH earning $75,000/year
• Biweekly pay: $2,885
• Week includes Thanksgiving (office closed)
• Still receive full $2,885 paycheck
Taxes:
• Federal withholding: ~$435 (22% bracket)
• FICA: $221
• State: ~$144 (5%)
Net pay: $2,085 (same as every other paycheck)
Example 2: Working Holiday with Premium
Hourly worker at $30/hour, works Christmas (double-time policy)
• Regular hours Mon-Fri: 32 hours × $30 = $960
• Christmas Day: 8 hours × $60 (double time) = $480
• Total gross: $1,440
Taxes:
• Federal withholding: ~$259 (18% effective)
• Social Security: $1,440 × 6.2% = $89
• Medicare: $1,440 × 1.45% = $21
• State: ~$72
Net pay: $999
Holiday premium $480 adds ~$340 to net pay after taxes
Example 3: Holiday Premium + Overtime
Worker at $25/hour, busy holiday week
• Monday-Thursday: 32 hours × $25 = $800
• Friday (Christmas, time-and-a-half policy): 8 hours × $37.50 = $300
• Saturday (overtime + no premium): 5 hours × $37.50 = $188
• Total: 45 hours, $1,288
Breakdown:
• Regular pay (40 hours): $1,000
• Overtime pay (5 hours): $188 (FLSA required)
• Holiday premium: $100 (8 hrs × extra $12.50)
Taxes:
• Federal: ~$232
• FICA: $99
Net pay: $957
Common Holiday Pay Policies
| Holiday Work Policy | Pay Rate | Example ($20/hr) |
|---|---|---|
| Regular rate only | 1.0× | $20/hour |
| Time-and-a-half | 1.5× | $30/hour |
| Double time | 2.0× | $40/hour |
| Triple time (rare) | 3.0× | $60/hour |
Retail, healthcare, hospitality often offer 1.5× to 2× for major holidays (Christmas, Thanksgiving, New Year's). Some employers give paid day off + regular pay if you work = effectively double pay.
Tax Withholding on Holiday Paychecks
Holiday pay is included in gross wages, so withholding is calculated normally. If your paycheck is larger due to holiday premium, withholding increases proportionally.
Withholding Example
Normal week vs Holiday week:
Normal Week:
• 40 hours × $25 = $1,000 gross
• Federal withholding: ~$120 (12% bracket HOH)
• Take-home: ~$790
Holiday Week (work Christmas at 2×):
• 32 hours × $25 = $800 regular
• 8 hours × $50 = $400 holiday premium
• Total: $1,200 gross
• Federal withholding: ~$180 (15% effective, bumped up slightly)
• Take-home: ~$930
Extra $200 gross → Extra $140 net (70% take-home)
The Math:
Holiday premium is ALWAYS worth it after taxes. Even if withholding seems high, you still take home 60-75% of the premium. Working Christmas at double-time? You're essentially earning your regular rate + 60-75% of another full rate.
Federal Holidays vs Company Holidays
Federal Holidays (11 total):
- • New Year's Day
- • Martin Luther King Jr. Day
- • Presidents' Day
- • Memorial Day
- • Juneteenth
- • Independence Day
- • Labor Day
- • Columbus Day
- • Veterans Day
- • Thanksgiving
- • Christmas
Common Company Holidays:
- • Most offer 6-8 paid holidays
- • Typical: New Year's, Memorial, July 4th, Labor, Thanksgiving, Christmas
- • Some add: Day after Thanksgiving, Christmas Eve, New Year's Eve
- • Private employers NOT required to follow federal holidays
Key Point:
Private employers have NO federal obligation to give paid holidays off OR pay premium rates. All holiday benefits are company policy. Government employees typically get all 11 federal holidays paid.
💡 Holiday Pay Planning Tips
1. Always Accept Holiday Work if Offered
Time-and-a-half or double-time means 60-75% more money in your pocket after taxes. Great way to boost income!
2. Request Your Top Holiday Priorities Off
If family time matters most for Christmas, request it early. Work less important holidays for the premium pay.
3. Holiday Premium Counts Toward 401(k)
If you contribute % of pay to 401(k), holiday premium increases your contribution that paycheck. Automatic savings boost!
4. Use Holiday Pay for Debt or Savings
Bigger paycheck = perfect time to make extra payment on loan or bulk up emergency fund. Don't let lifestyle inflation eat it!
5. Check PTO Policy
Some companies give comp time instead of premium pay. Understand your policy - cash vs time off trade-off.