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Accrued Holiday & Holiday pay for Temporary Staff

How do you calculate Accrued Holiday and Holiday Pay for Temporary Staff?

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Hi All,

We currently have a few temporary workers who started at the beginning of August and their contracts will end on 31st August. They are entitled to 33 days of holiday a year (inclusive of bank holiday) and are not contracted for set days/hours (but some will be working 5 days a week which I don't have an issue calculating). One of the temporary workers will be working 4 days a week but only for two of the weeks of August as the other two weeks, they are on unpaid annual leave. 

For this particular worker, how would I go about calculating accrued holiday/holiday pay? I believe it will be in the region of 1 to 1.5 days but I would prefer that my calculation for this is correct. 

Thank you for all your help in advance.

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By New To Accountancy
07th Aug 2020 15:42

Hi,
There is a calculator on Gov.uk that may help :

https://www.gov.uk/calculate-your-holiday-entitlement

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By psimonparsons
08th Aug 2020 07:12

Holiday accrues on a basis of calendar elapsed time as opposed to time worked. If the period under contract is from 1-31 August and the annual entitlement basis is 33 days (based on no fixed days work so 5 days a week), then there potentially two methods depending on use of a month, or the days in the year.

So 1/12th of 33 days is 2.75 days paid holiday. You could consider 31/366, that would equate to 2.8 days.

If you are indicating a fixed 4 days (the same days each week no variation), then the annual entitlement basis would be 4/5 of 33 = 26.4. 1/12th would be 2.2 days paid holiday.

The basis of payment is on the average weekly paid weeks - as they have worked for less than 52 weeks, you average over the weeks you actually have where they are paid. (ignoring weeks without pay). So the variable nature of the payment is governed by this average earnings.

The gov calculator will indicate that they are entitled to 1/12 of 5.6 weeks, how you determine that into days and hours is a choice, however the principle above offers some options which potentially meets.

The court of appeal ruled last summer that a % accrual based on actual time worked was unlawful and did not meet the requirements of the working time directive.

It is worth noting that 4 weeks falls under EU law (20days per annum), an added 1.6 weeks falls under U.K. employment rights (+8 days), the extra days over (in this case +5 days) are entirely governed by the employer terms and conditions as these days are above the statutory minimum rights.

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By psimonparsons
08th Aug 2020 07:24

Entitlement is not based on time worked but on length of the contract. So 1/12th of 33 days.

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By psimonparsons
10th Aug 2020 17:33

Holiday accrues on a basis of calendar elapsed time as opposed to time worked. If the period under contract is from 1-31 August and the annual entitlement basis is 33 days (based on no fixed days work so 5 days a week), then there potentially two methods depending on use of a month, or the days in the year.

So 1/12th of 33 days is 2.75 days paid holiday. You could consider 31/366, that would equate to 2.8 days.

If you are indicating a fixed 4 days (the same days each week no variation), then the annual entitlement basis would be 4/5 of 33 = 26.4. 1/12th would be 2.2 days paid holiday.

The basis of payment is on the average weekly paid weeks - as they have worked for less than 52 weeks, you average over the weeks you actually have where they are paid. (ignoring weeks without pay). So the variable nature of the payment is governed by this average earnings.

The gov calculator will indicate that they are entitled to 1/12 of 5.6 weeks, how you determine that into days and hours is a choice, however the principle above offers some options which potentially meets.

The court of appeal ruled last summer that a % accrual based on actual time worked was unlawful and did not meet the requirements of the working time directive.

It is worth noting that 4 weeks falls under EU law (20days per annum), an added 1.6 weeks falls under U.K. employment rights (+8 days), the extra days over (in this case +5 days) are entirely governed by the employer terms and conditions as these days are above the statutory minimum rights.

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By radhasyam
09th Sep 2020 04:01

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