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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?

Replies (4)

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paddle steamer
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.

Thanks (1)
Replying to DJKL:
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.

Thanks (0)
Replying to DJKL:
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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