Tie-out tool / Holiday and PTO hours

Does holiday pay count toward qualified overtime?

No. Holiday, vacation and sick pay is not pay for hours worked. If those hours pushed someone past 40 on the register, the overtime paid is not qualified overtime and stays out of Code TT.

Example

A week with a paid holiday: 36 hours worked plus 8 holiday hours. Payroll counts 44 paid hours and pays 4 at time-and-a-half.

Piece	Amount at $20
Register overtime pay (4 x $30)	$120.00
Hours worked over 40	0
Code TT	$0.00

The rule

Payments "for occasional periods when the employee is not at work due to vacation, holiday, illness" are "not made as compensation for his hours of employment", and "no part of such payments may be credited toward overtime compensation due under the Act." (29 CFR 778.218(a))

An employer may choose to count those hours toward overtime (29 CFR 778.202(a)), but overtime the FLSA does not require is not qualified overtime. (IRS FS-2026-13, Q1 and Q16)

Holiday hours that were worked

Hours actually worked on a holiday are hours worked. They count toward 40 like any other day. Premium pay for working the holiday is qualified only for hours over 40 in the workweek, and only the half-time part.

Do the whole year from a file

Drop a timesheet CSV, paste the register overtime totals, and get a worksheet per employee with the reason for every difference.

Open the tie-out tool

Runs in your browser. Payroll data is never uploaded.

Questions

Do PTO and sick hours count toward the 40 hours?

Not under the FLSA. Only hours worked count. PTO, sick and holiday hours are paid time off.

We pay overtime after 40 paid hours. Is that wrong?

No, it is allowed and more generous. It only means part of the register overtime is not Code TT.

Sources

Fetched 2026-11-10. Regulation text was checked against the federal annual edition; links open the current online version.

Updated 2026-11-10. Tickfoot is an information tool, not tax, legal or professional advice.