Calculating holiday pay

Calculating holiday pay

When it comes to calculating holiday pay for your staff, you can find yourself easily confused.

Over the decades, more and more legislation and legal precedent have meant that it’s harder than ever to get to grips with holiday pay – especially if you have a variety of contracted workers.

From the distinction between guaranteed and non-guaranteed overtime. To working patterns and countless other variables, there is plenty to keep in mind.

So today, we’re creating the Employer’s complete guide to calculating Holiday Pay!

What is the holiday entitlement?

Depending on the contract, every month worked employees are given a holiday allowance.

This allowance will run throughout the working year and can be taken at a time agreed with the employer.

Most workers are entitled to 5.6 weeks’ paid holiday a year.

Working patternHow a week’s pay is calculated
Fixed hours and fixed pay (full- or part-time)A worker’s pay for a week
Shift work with fixed hours (full- or part-time)The average number of weekly fixed hours a worker has worked in the previous 52 weeks, at their average hourly rate
No fixed hours (casual work, including zero-hours contracts)A worker’s average pay from the previous 52 weeks (only counting weeks in which they were paid)

Calculating holiday earnings

You can use the holiday calculator to work out how much leave someone should get.

Remember that depending on your worker’s contract type, this may vary.

For instance, someone not working full-time hours, will not receive as much holiday as someone who does.

Holiday earnings should always match the wage your employees would normally receive.

For example, if they work 37 hours every week and get paid £400 a week when they take a week’s holiday, they must get paid £400.

Can you refuse holiday requests?

Employers can refuse a holiday request but must have a valid reason.

If someone is asking to take their full allowance at once for example. Or want to take a week off at your busiest period that would cause productivity disruption.

Refusals must also be consistent. If you refuse one at the same time you approve another, it can be construed as biased or discriminatory.

Holiday policy:

If you do refuse requests and find yourself in trouble, you’ll need to back up your actions.

Do you have a holiday policy?

Like any employee policy, this document should outline exactly what is and isn’t appropriate for your business. It should be available both online and in paper form in the office and should be adhered to at all times.

policies could include how many days your workers can take at once. How many workers can be off at the same time? Time off during bank holidays or over a festive period.

You can even ensure that employees take their holiday to avoid payment of unused days.

How can a workforce management system help?

Our workforce management software allows you to easily handle holiday allowances, requests and pay.

Not only will it track your employee’s hours and calculate how much holiday they have to take. But it will:

  • Enable employees to see their balance, request history, and can even make holiday requests
  • Managers can see when holiday requests are pending and easily review the team status to minimise disruption and production – and ensure minimum staff levels are maintained
  • View comprehensive holiday reporting across groups, departments, and teams
  • Fixed or accrued hours, part-timers, bank staff, zero-hours contracts – all easily managed

Want to know more?

To book a demo – click here.