A holiday list isn't an HR nicety. It's the input that decides how many days are payable in every month of the year.
A company holiday calendar is the published list of days on which the business does not operate, fixed before the year starts. It matters beyond convenience: holidays determine payable working days, which determine per-day pay, which determines every loss-of-pay and pro-rata calculation for the year. A calendar published in March instead of December means the first quarter's payroll was computed against an assumption.
Payable days in a month = calendar days − weekly offs − declared holidays. That figure drives:
Which means an unpublished or late calendar is not a minor administrative gap. It means the first payroll runs of the year were calculated against a guess, and if the final calendar differs, those months need revisiting.
Build it in layers rather than as one flat list:
Publish one calendar per location if you operate in more than one state. A single merged list either short-changes one office or gives everyone the union of both, which is expensive.
The most useful structural decision available to you:
| Fixed holidays | The office is closed. Everyone is off. Typically 8–12 days including the three national holidays. |
|---|---|
| Restricted / optional holidays | A published list of, say, 8–10 festival days from which each employee chooses 2–3 to take. The office stays open. |
Restricted holidays solve a real problem for diverse teams: India has far more genuinely significant festivals than any company can close for, and they matter to different people. Rather than picking winners centrally, publish the list and let people choose. The cost stays bounded — you are still only paying for 2–3 days per person — while the outcome is markedly better for the people whose festivals did not make the fixed list.
Two rules keep it workable: employees must declare their picks in advance (so staffing is predictable), and a restricted holiday taken is a paid day, not leave.
The floor is statutory. Most state Shops and Establishments Acts require the three national holidays plus a number of additional festival holidays, and the specifics vary by state — some prescribe a minimum count, some prescribe the days themselves. Check the position for each state you operate in.
Above the floor, a common shape for Indian small businesses is 10–12 fixed holidays plus 2–3 restricted, alongside the leave entitlement. Two things worth remembering when you decide:
Leave entitlement benchmarks are covered separately here.
Publishing the calendar is not just sending a PDF. Four things must happen together, or the calendar drifts from reality:
The most common holiday-calendar bug in small businesses: the holiday is in the PDF but not in the attendance sheet, so everyone shows as absent on Republic Day and someone spends the last week of January fixing 40 rows by hand.
Calendars change — a state declares an unexpected holiday, weather closes an office, an election day is announced. Handle these as explicit calendar entries rather than as ad-hoc attendance edits for every employee. One entry marks the day non-working for everyone; forty manual edits create forty chances to miss someone, and no audit trail explaining why.
Also decide, in advance, what an unplanned closure does to payable days for that month. Treating it as a paid holiday is the usual and simplest answer.
The holiday list is one line of the wider compliance calendar — the monthly and annual statutory dates belong on the same page.
| National holidays (all India) | Republic Day (26 Jan), Independence Day (15 Aug), Gandhi Jayanti (2 Oct) |
|---|---|
| Typical Indian SMB shape | 10–12 fixed holidays + 2–3 restricted/optional per employee |
| Fixed holiday | Office closed, everyone off |
| Restricted holiday | Office open, each employee picks a set number from a published list |
| Publish by | Before the year begins — payroll needs it from the first run |
| Per-location calendars | Required if you operate across states; state lists differ |
| Payroll dependency | Payable days = calendar days − weekly offs − declared holidays |
Republic Day on 26 January, Independence Day on 15 August and Gandhi Jayanti on 2 October are observed nationally and apply to essentially all employers. Beyond these, additional festival holidays are governed by state Shops and Establishments Acts and vary by state, so check the requirement for each state you operate in.
Most Indian small businesses offer around 10 to 12 fixed holidays plus 2 to 3 restricted or optional holidays per employee, on top of the leave entitlement. The statutory floor is set by the applicable state Act and must be met; anything above it is a company decision based on your operating pattern and what your peers offer.
A restricted or optional holiday is a day from a published list of festivals that individual employees may choose to take, up to a set number, while the office remains open. It lets a diverse team observe the festivals that matter to them without the company closing for all of them, and the day is treated as paid rather than as leave.
That is a company decision, not a statutory one. Some employers shift such holidays to the adjacent working day, most do not. Whichever you choose, state it in the policy and apply it the same way every year, because inconsistency here is noticed immediately.
Payable days in a month are the calendar days minus weekly offs minus declared holidays. That figure drives per-day pay when a working-days divisor is used, pro-rata salary for mid-month joiners and leavers, and the payable-days line on the payslip. If the calendar is published late or is not loaded into the system, those calculations are made against an assumption.
Add the change as a single calendar entry that marks the day non-working for everyone, rather than editing each employee's attendance individually. One entry is consistent and traceable; dozens of manual edits create missed employees and leave no explanation of why the records changed.
Merik holds the company holiday calendar as data, not as a document — the days you declare feed the attendance module directly, so nobody shows as absent on a day the office was closed, and they feed the same payable-days figure the monthly payroll run uses. One entry, applied everywhere, instead of a PDF plus forty manual corrections.
One entry, applied everywhere, instead of a PDF plus forty manual corrections. Worth knowing how it reaches pay: the monthly payroll run prorates on calendar days and derives unpaid days from attendance status, so a declared holiday protects the day in the register rather than changing the divisor. See the holidays and attendance modules, the feature list, or how it works.
A practical benchmark for annual, sick and casual leave policies.
How to stop unused leave turning into an unbudgeted year-end bill.
Every monthly, quarterly and annual statutory date, with the thresholds that apply.