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Holiday pay variable hours, different results

What am I missing?

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I have a client with one employee on his payroll, zero hours contract.

His total hours for the last worked 52 weeks total 1630.5

If I use the 12.07% method (not sure if this is still allowed per certain search results) the entitlement is 196.80 hours

If I use the average hours method x 5.6 weeks, the entitlement is 175.62 hours (1630.5/52 = 31.36, 31/36x5.6 is 175.62)

Quite some difference and not sure which to use (obvious which one favours my client)

Many HR websites still show the 12.07 method so are companies still using this method?

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paddle steamer
By DJKL
22nd Sep 2021 10:24

Re the second you do not use 52 as your denominator you use 46.4 (52-5.6), the problem with 52 is that is certainly the number of weeks in a year but not the number of weeks you expect the employee to work.

When you do the 12.07 you calculate it as 260 days work-28 days holiday=232 days expected work, 28/232x100=12.0689%.

When you try the other approach you also have to reduce the denominator re the annual holidays

Rework your calculation you will see the results are essentially the same.

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Replying to DJKL:
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By AdamMurphy
22nd Sep 2021 10:41

Many thanks for that, yes the results are definitely essentially the same now. Knew I was missing something.

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Replying to DJKL:
RLI
By lionofludesch
23rd Sep 2021 07:22

Councidentally, or perhaps not, your £21 difference is 12.07% of your £175.

Give or take a few pence.

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