diff --git a/app/Services/PayrollService.php b/app/Services/PayrollService.php
index e6887c6cb..7e87f7321 100644
--- a/app/Services/PayrollService.php
+++ b/app/Services/PayrollService.php
@@ -58,7 +58,7 @@ class PayrollService
 
         $earnedBasicSalary = 0;
         $holidayPay = 0;
-        $restDayPremium = 0;
+        $holidayDaysNotWorked = 0;
         $regularOtTotal = 0;
         $nightDiffAmount = 0;
         $paidLeavesCount = 0;
@@ -183,9 +183,8 @@ class PayrollService
                     $premium = ($earnedDaily - $actualDailyRate);
                     if ($isRegularHoliday || $isSpecialHoliday) {
                         $holidayPay += $premium;
-                    } else {
-                        $restDayPremium += $premium;
                     }
+                    // Rest Day Premium removed per client request
                 }
 
                 // 2. Overtime Calculation (Compounded)
@@ -233,12 +232,9 @@ class PayrollService
                     $daysWorked++; // Treat as paid day
                     $paidLeavesCount++;
                 } elseif ($isRegularHoliday) {
-                    if ($isDailyWage) {
-                        // Daily/Rank & File: DOLE requires 100% holiday pay even if not worked
-                        $holidayPay += $actualDailyRate;
-                    }
-                    // Monthly employees: their fixed cut-off salary already covers this day.
-                    // No additional holiday pay needed. Don't count as absence.
+                    // All employees: extract holiday as separate earning line
+                    $holidayPay += $actualDailyRate;
+                    $holidayDaysNotWorked++;
                 } else {
                     // Only count as absent if NOT a rest day AND NOT a special holiday
                     // Monthly employees' fixed salary covers special holidays automatically.
@@ -267,8 +263,10 @@ class PayrollService
             // they get their exact fixed cut-off pay (Monthly / Divisor)
             $cutOffSalary = $grossMonthly / $divisor;
             
-            // Extract paid leaves from their basic salary to show it explicitly in the earnings
-            $earnedBasicSalary = max(0, $cutOffSalary - $paidLeavesAmount);
+            // Extract paid leaves AND holiday pay from basic to show them as separate line items
+            // This matches the client's expected payslip format:
+            // Basic = CutOff - Leaves - Holidays, then add them back as separate earning lines
+            $earnedBasicSalary = max(0, $cutOffSalary - $paidLeavesAmount - $holidayPay);
             
             // We explicitly deduct absent days (LWOP)
             $absenceDeduction = $absencesCount * $actualDailyRate;
@@ -358,12 +356,10 @@ class PayrollService
             ['name' => 'Holiday Pay', 'amount' => number_format($holidayPay, 2, '.', '')],
         ]);
 
-        if ($restDayPremium > 0) {
-            $earnings[] = ['name' => 'Rest Day Premium', 'amount' => number_format($restDayPremium, 2, '.', '')];
-        }
+        // Rest Day Premium removed per client request
 
         // 7. Totals (Intermediate for Tax)
-        $totalEarnings = $earnedBasicSalary + $paidLeavesAmount + $nightDiffAmount + $regularOtTotal + $holidayPay + $restDayPremium;
+        $totalEarnings = $earnedBasicSalary + $paidLeavesAmount + $nightDiffAmount + $regularOtTotal + $holidayPay;
 
         // 8. Withholding Tax Calculation (Based on Gross per user request)
         $tax = 0.00;
@@ -419,7 +415,7 @@ class PayrollService
                 'reg_ot_hours' => number_format($totalOvertimeHours, 2),
                 'reg_ot_amount' => $regularOtTotal,
                 'night_diff_amount' => $nightDiffAmount,
-                'holiday' => $holidayPay,
+                'holiday' => $holidayDaysNotWorked,
             ]
         ];
     }
diff --git a/resources/views/payslips/template.blade.php b/resources/views/payslips/template.blade.php
index 32d0fa6f9..6988bd112 100755
--- a/resources/views/payslips/template.blade.php
+++ b/resources/views/payslips/template.blade.php
@@ -278,7 +278,7 @@
         </tr>
         <tr>
             <td><strong>Night Diff:</strong> {{ isset($summary['night_diff_hours']) ? $summary['night_diff_hours'].'h' : (isset($summary['night_diff']) ? $summary['night_diff'].'h' : '0h') }}</td>
-            <td><strong>Holiday:</strong> {{ isset($summary['holiday']) ? $summary['holiday'].'h' : '0h' }}</td>
+            <td><strong>Holiday:</strong> {{ $summary['holiday'] ?? 0 }}</td>
             <td><strong>Leaves:</strong> {{ $summary['leaves'] ?? 0 }}</td>
         </tr>
     </table>