Friday, 13 January 2023 15:28

Holiday Calculations

Holiday calculations for employees continues to be one of those subjects that’s a continual source of headaches for employers. It ought to be straightforward but there’s always something that causes a complication. In recent years it’s been changes bough on by an increase in flexible working arrangements; full-time staff switching to part-time working part-way through the holiday year for example.

To add to the confusion, this year, as last year, there will be an extra public holiday to account for Royal events. Strictly speaking, the wording in your employment contracts determines whether or not you are obliged to give the day off for the King’s coronation. But taking into account the fact probably no-one else in the country will be working in the country on that day, except hospitality venues, care and those directly involved in the event, do you really want to be the employer who insists that your staff come into work?

Holidays are a statutory right so employers have legal obligations and restrictions on how they apply them. There are a couple of ways that we can describe the statutory holiday entitlement in a contract of employment. Based on a full-time employee it could be either:

  • 20 days holiday plus 8 days public/bank holiday
  • 28 days (5.6 weeks) including public/bank holidays

Our preference is to use the latter option as more jobs these days, especially in hospitality and retail, include working on bank holidays and employees who are contracted to work them should be entitled to the equivalent time off in lieu. It also makes calculating part-time workers’ holiday much easier.

For part-time workers, the easiest way to determine holiday allowance is using a pro rata calculation based on the full time equivalent hours of an employee. For example, a part time worker, or someone who is reducing their hours from 5 days per week to 3 days, simply has their holiday adjusted by 40% or two fifths. So, someone who would normally be entitled to 28 days including bank holidays, would get 16.8 days which we would round up to 17 days.

For an employee who works part time hours but for five days per week, it’s even easier to calculate as they would still be awarded 28 days holiday. This is because for any day they take off they will only effectively be taking holiday for the time they would usually work. In other words, for someone who works 9.00am to 2.00pm Monday to Friday, any days holiday they take will effectively be for those hours; so one day’s holiday is still only 9.00am to 2.00pm.

It’s important to get the calculation right and we would usually default to the online .Gov holiday calculator when calculating holiday as, should there be any disagreements, it would be difficult to argue with what the Government has told you. However, the .Gov calculator doesn’t always have options for every scenario and so sometimes it still comes down to a manual calculation.

In addition to the rules surrounding statutory holiday allowances, here are some other points you should know:

  • Employees who work irregular hours, including term time and zero hours are entitled to 28 days holiday provided they have an ongoing employment contract
  • If an employee is on approved sickness absence during a bank holiday that forms part of their minimum holiday entitlement, the employer should allow them to take a day off in lieu
  • If an employee is on approved sick absence during a booked holiday, then any days lost to sickness can be reclaimed as holiday. Our advice is that before allowing this to be reclaimed, seek evidence of sickness e.g. through a fit note or other medical documentation / evidence. Also ensure this is included in your policies and employee handbook.

Finally As a rule of thumb, when a holiday calculation produces a fraction of a day, you should always round up.

We have produced a new Holiday Fact Sheet which will shortly be available for download from our Toolkit section on the website. If however you prefer to talk things through, we’re available on the phone or by email on 01452 331331 orThis email address is being protected from spambots. You need JavaScript enabled to view it.


Read 767 times Last modified on Friday, 13 January 2023 15:39


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