How to calculate holiday or overtime payment
With Chinese New Year—also known as the Spring Festival— it brings a mix of celebration and operational challenges for companies. Most companies will temporarily shut down their offices, while some employees will need to work overtime during the holidays.
This article outlines essential considerations for companies.
Holiday Payment Calculation
Statutory holidays Payment:
In 2025, the Spring Festival has four legal holidays: New Year’s Eve, the first, second, and third day of the first lunar month. During these four days, if employees enjoy holidays as usual, they will receive their normal wages. The holiday pay is calculated based on the employee’s daily or hourly wage standard.
Rest Day Pay:
The fourth, fifth, sixth, and seventh days of the first lunar month are rested by the government. If employees rest on these days, they will also get their normal pay.
Other holidays are also calculated according to this rule.
Overtime Payment Calculation
Many companies need to adjust employee leave schedules and establish duty rosters to ensure the smooth operation of production and sales activities during the holiday. Adequate staffing during the holiday period is essential for daily operations and handling emergencies. Certainly, when requiring employees to work during the holiday, compliance with overtime payment regulations is critical.
The basis for calculating overtime payment and holiday payment (the base shall not be lower than the minimum wage standard stipulated by the city) shall be the monthly wage for normal attendance that the employee’s position is intended to correspond to, excluding year-end awards, transportation subsidies for commuting to and from work, working-meal subsidies, housing subsidies, mid- and night-shift allowances, summer high-temperature allowances, and other wages paid under special circumstances.
Under Chinese labor laws and regulations, overtime payment rates vary depending on the type of rest days and the working hour system implemented.
Under the standard working hour system:
Extended Overtime:
If the employer arranges for employees to work longer hours than the standard daily working hours, overtime wages will be paid in accordance with not less than 150% of the hourly wage base.
Overtime work on rest days:
If the employer arranges for the employees to work on a rest day and cannot arrange for a compensatory break, the employer shall pay no less than 200% of the wages.
Overtime work on statutory holidays: (i.e., Jan 28-31 in the case of CNY)
If the employer arranges for the employees to work on a statutory vacation, the employer pays no less than 300% of the wages and generally does not arrange for compensatory time off in lieu of overtime pay.
Under the comprehensive working hour system:
If the employer arranges for employees to work performed on statutory holidays, not less than 300% of the wages shall be paid. However, no rest day is outlined under this system, so for work performed on those adjusted working days and weekends, no overtime payments are available.
Under the non-fixed work hour system:
Overtime regulations vary across regions. For instance, in Beijing, employees under the non-fixed work hour system are not entitled to overtime pay for hours worked on statutory holidays. However, in Shanghai, these hours are considered overtime, and employers are required to pay compensation of up to 300% of the wages.
Paid Annual Leaves
According to the Regulations, if an employee has worked for a cumulative total of 1 year but less than 10 years, he or she is entitled to 5 days of annual leave; if an employee worked for a cumulative total of 10 years but less than 20 years, he or she is entitled to 10 days of annual leave; and if an employee worked for a cumulative total of over 20 years, he or she is entitled to 15 days of annual leave.
National statutory holidays and rest days shall not be counted as days for annual leave.
There are some other leave situations such as sick leave, marriage leave, maternity leave, etc. We will continue to share the relative regulations and calculations with you in the future.
For more information, please contact us.