Employee Holiday Entitlement & Holiday Pay

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Posted:
May 8 2018

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Holiday Entitlement Plane

What is holiday entitlement in the UK?

All employees in the UK are entitled to time off. This is known as their holiday entitlement.

Currently, UK law states that an employee’s holiday entitlement is 5.6 weeks per year if they’re full time. This means that someone working 5 days per week is entitled to 28 days paid holiday each year.

Holiday entitlement for part time workers is based on the hours they work but is the same 5.6 weeks per year as for full time employees. So for a part time employee working 2 days per week, their holiday entitlement is 11.2 days per year.

You can’t round down an employee’s holiday entitlement but you can round it up. For example if an employee is entitled to 15.6 days holiday, you cannot round it down to 15 days but you may choose to round it up to 16 days.

The 5.6 week entitlement is the statutory minimum and can include bank holidays. In an employment contract or staff handbook, you can give your staff more than the minimum but not less.

Calculate Holiday Entitlement

If an employee works 5 days a week their holiday entitlement will be 5.6 weeks or 28 days in any 12 month period. However if you have employees who work on different part-time patterns here’s how you can calculate their entitlement:

Annual leave for Part-time staff

For an employee who works full days, but less than 5 per week simply multiply the number of days they work by 5.6 to give you their holiday entitlement.

Example:    3 days per week x 5.6 = 16.8 days leave per year

For an employee who doesn’t work full days but a set number of hours each week, simply multiply these hours by 5.6 to give you a leave entitlement.

Example 21 hours per week x 5.6 = 117.6 hours leave per year

Annual Leave for Casual and irregular staff

For employees who work irregular hours the calculation is slightly different. For these workers, holiday entitlement accrues as hours are worked. To calculate based on irregular hours multiply the number of hours worked by 12.07%

Example: 25 hours worked x 0.12.07% = 3 hours and 1 minute holiday

Holiday Pay Entitlement

As an employer, you must ensure that employees are paid in full during their holidays.

Even though a full time employee is entitled to 5.6 weeks holiday per year, this is effectively accrued at just over 2 days per month. Therefore, if an employee leaves part way through the year having taken more holidays than they have accrued to that point then you are entitled to reclaim the money.

Similarly, if an employee leave part way through a year then you must pay them for any accrued holidays they have not taken.

To work out any holiday pay you owe to your employee or that your employee owes to you multiply the total holiday entitlement for the year by the percentage of the year that has elapsed at the point of leaving. Take this figure and subtract the amount of holiday already taken to find the amount of leave the employee is entitled to.

If the number is positive, you should pay the employee what they are owed; if it is negative then you can reclaim what you are owed.

Notice for taking holidays

You can decide when an employee can take their holidays as long as you allow them to take, the statutory minimum either each year or the contractual entitlement you have set out. Employees begin accruing their holidays as soon as they start work and any accrual continues through any maternity, paternity or adoption leave.

An employee must give notice if they would like to take a holiday and you can choose whether to approve the request or not. Generally the notice give would be two times the length of the proposed holiday. For example, 4 weeks’ notice for a 2 week holiday.

Managing holiday entitlement

It is your responsibility to keep track of when your employees are taking holidays to ensure all employees take at least the minimum entitlement each year. It is also in the best interests of your business to ensure holidays do not leave you with staff shortages.

If you have, a growing number of employees then managing all their holiday entitlement can become complex and time consuming. There is a lot to calculate and manage, particularly if people are joining and leaving at different times throughout the year, hours change or people are on different contracts.

That’s when HR Software can help. Managing your employees’ holiday is an essential part of running a business and CascadeGo can help save you time and relieve logistical headaches.

Contact us for a free trial or a tailored quote and see how you can benefit from:

  • Enabling employees to manage their own admin and simplify holiday requests
  • Powerful reporting to give you instant access to a headcount
  • Calculate a Bradford Factor score for all of your employees to manage absence and ensure it does not become a problem.

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