You know how to calculate holiday pay.......

……But are you including everything? And are you using the correct reference period?

The holiday season is in full swing. It seems simple but do you know if you are paying your employees and workers correctly when they have time off?

What payments do you include and how do you calculate holiday pay?

So, you know the minimum paid holiday per year is 28 days or 5.6 weeks including bank holiday entitlement. And I assume you added the extra bank holiday this year?

And you know you need to pro rata entitlement for people who work part time.

But, do you know these entitlements also apply to workers as well as employees, including Agency Workers? Are these members of your workforce covered?

And do you know what payments need to be included in your holiday pay calculation?

Following various employment law cases, you need to take other regular payments such as commission, overtime and shift bonuses in to account in addition to basic pay/salary when calculating how much to pay when your employees and workers take holiday. These additional payments may still need to be considered even if voluntary and non-contractual - do you know what to include?

Plus a further recent case has changed the reference period you might need to be using for anyone where you calculate holiday pay based on variable working hours. What reference period do you use for your calculations?

This is a complex area and not all payroll software is set up to make these calculations automatically.

If you want some assistance in checking how you are calculating holiday pay or want a change project with your HR, payroll and IT teams to make relevant process and system updates for your payroll, then get in touch for a FREE initial consultation.