How Do I Calculate My Employees Holiday?

It’s the time of year for the holiday pay question!

One of the primary employment rights in the UK is that workers are entitled to a minimum amount of paid time off work as holiday, or annual leave.

Holiday entitlement and how holiday pay is calculated will depend on how many hours an individual works.

For employers, this can quickly become complicated when someone doesn’t work fixed or regular hours.

What is Holiday Pay?

Holiday pay is paid time off work – typically it is one week’s pay for each week of leave taken

What Paid Holiday are my staff entitled to?

Almost all workers in the UK have the legal right to 5.6 weeks’ paid holiday per year. This is the statutory minimum amount of paid leave that an eligible individual is entitled to take on an annual basis.

This can include agency workers, shift workers, casual workers, term-time workers and workers on zero-hours contracts.

Employers can provide their staff with greater contractual rights to paid leave, although they cannot offer them less than the legal minimum.

If a new recruit starts their job part way through the annual leave year, they’ll only be entitled to the remaining amount of their total leave for that year on a pro rata basis.

The dates of the statutory leave year will usually be set out in the contract of employment, written statement of particulars or any annual leave policy.

The leave year will often run from 1 January to 31 December, where statutory leave must be taken during this timeframe, unless contractual provision is made for the right to carry leave over.

How Is Holiday Entitlement Calculated?

For a full-time employee working fixed hours over a 5-day week, the statutory minimum amount of paid leave of 5.6 weeks equates to a total of 28 days per year, although all bank holidays and public holidays can be included in this entitlement.

A part-time employee will be entitled to fewer statutory paid days’ leave than their full-time counterpart.

If an employer gives full-time employees more than the statutory annual leave, then part-time employees must get the same, albeit calculated pro rata.

 

How Is a Rate of Holiday Pay Calculated?

All workers are legally entitled to one week’s pay for every week of statutory leave that they take, where the rate of statutory holiday pay is calculated according to the amount of days or hours that someone works and how they’re paid for that time.

For full or part-time workers with fixed days or fixed hours, this is relatively straightforward, although it can become much more complex for those working irregular hours.

However, the general principle is that holiday pay received by a worker should reflect what they would’ve earned if they’d been at work, regardless of their working pattern.

Get Support From The Moorgate Experts

If the thought of calculating rates, hourly pay, accrued holiday and paid time off is frazzling your brain, we’re here to help!

Paid annual leave is a basic right in the UK and when it goes wrong, it can cause huge resolution issues which could result in a claim being made via an employment tribunal.

If you would like to speak to us about holiday, payroll, or if you have a different kind of PAYE question that you’d like advice on, please do contact us. A member of our expert payroll team would be delighted to help you.

We offer extremely competitive rates on a full service payroll from 1-100 employees. Call us to see how we can save you time and money.

 

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